how much tax do you have to pay in your country?

[Kak]

If taxes were paid on revenue instead of profit it would screw up everything so that isn't the case.

 

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[DeletedUser394]

I'm just confused now. I hate Canada.

LOL.

Here goes (these are fictitious numbers for simplicity)

Corporate tax: No way around this one unless you operate at a loss or breakeven. Max tax is only 14% if the business makes under $500,000/yr.

Personal Income Tax: You don't pay tax if you declare less than $17.5k/yr (approx)

So the goal is to write off everything you possibly can so that you artificially keep your PERSONAL income below the threshold where you would have to pay tax.

Capital Gains Tax: 50% is tax exempt. 50% you have to pay tax on. You can use as many tax credits that you have banked to offset any capital gains tax. I currently have around $28,000 in credits on reserve.


@theag I never said I never paid corporate tax. The goal was to keep it as close to $0 as possible. I never pay income tax.

Also it's 2 o'clock in the morning, so maybe I'm making more sense in my head than here, but this post above should make it a bit clearer.

As to your point about paying corporate tax on profit, you're correct. The goal is to minimize profit.

Say I bring in $100k in revenue. I tried to do my best to get to $100k expenses (exagerated numbers for simplicity). I never succeeded in that regard, but I always succeeded in never paying income tax, even though I technically lived on much more income.

 

[Kak]

Ok, so you are saying if you make 100k you blow 82.5k on stuff you can call business expenses. Then your salary at 17.5 is the last expense to the business. That zeros out the business. Then at 17.5 you don't pay anything on a personal level...

 

[DeletedUser394]

Ok, so you are saying if you make 100k you blow 82.5k on stuff you can call business expenses. Then your salary at 17.5 is the last expense to the business. That zeros out the business. Then at 17.5 you don't pay anything on a personal level...

We have a winner!

 

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[GuestUser156]

Denmark in rough numbers ...

VAT: 25 %
Corporate tax: 25 %
Dividend tax: 27 %
Personal income tax: 42 %
- Above $77k annually: +15%

 

[JamesSJ]

Where is that?



And for me at the moment:

Income tax: 0% (I'm a sailer, no resident of any country, even though I am a citizen of one)
Corporate tax: once I finally get started 0% as it's not registered anywhere...you need to be a resident of a country to be able to register a company...I'm not a resident so I can't register a company.

For the long run I'm looking to register my company though in a nice area where:
1) it's a safe/reliable place to register my online business
2) No worldwide income taxes.
etc etc etc.

Hong Kong might interest you.

It's very simple to set up, although you will need to be in the country in person to open up a local business bank account. Other than that you can do it yourself or hire someone locally to do it all for you.

However if you are American you might find the bank account difficult. HK did a deal with the US/IRS to report American bank account activity and I believe now some banks point blank refuse American citizen bank account due to the increased administration work. Although i guess it will be a case by case situation ( i know of two people personally who ran into difficulties recently).

I also sponsored my own visa into Hong Kong with this business which again was a pretty simple process - just required some forms, a business plan and a chunk of cash parked in the bank whilst I applied. You don't need to live in HK to set up and run a business there - I just decided I wanted to.

Any questions feel free to message me.

 

[GlobalWealth]

Basically 0%.

My businesses are in zero tax jurisdictions. I am not a tax resident where I live. And as an American I take advantage of the FEIE (foreign earned income exclusion) for about $150k/y. All other income is deferred offshore.

 

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[McCoyH]

Well, 'everything' is an exaggeration haha.

My rent is a business expense (home 'office'), my transportation, a good portion of meals away from home, all domestic and international travel, etc

The goal is to operate at or near $0 in net profit, although haven't succeeded at that yet.

I set my take home pay to be below the threshold of having to pay income tax.

So my purchasing power is anywhere from 2x-3x my actual declared income. ($15k declared, $45k actual for example)

I'm just playing the system basically.

It won't be sustainable as my revenues/income increases, but at that point I'll probably be out of the country 180 + 1 days per year to some tax haven country.

Hate to see what happens if the Gov ever looks into this... I'm sure you're walking the line just fine, but still sketchy...

 

[mosdef]

only positive with taxes in sweden is that you can go to university, medical care and when you get old you get get some money to live on.

socialism right?=

 

[Ikke]

Regarding not having a profit in your business. Here in the Netherlands you can set a reserve in your busines. Which is basically a piggybank on your balance where you store the money untaxed for future spending.

 

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[DeletedUser394]

Hate to see what happens if the Gov ever looks into this... I'm sure you're walking the line just fine, but still sketchy...

Again, operating at or near $0 profit is not a problem where I live.

I'm emulating the strategies of one of the wealthiest individuals I know, who has been audited on multiple occasions and has been found to have not violated any laws whatsoever.

Capital depreciation is another strategy that the wealthy can utilize (and that I utilize) to reduce or eliminate one's tax burden. I don't want to delve into that as it's beyond the scope of the original topic.

Sketchy? Possibly, but so is government theft in the form of taxes. Again beyond the scope of this topic.

The end goal is to live 180 + 1 days in a foreign country. That too is using a loophole available to the anyone (but in reality only those with the means/wealth) to 'skirt' the lines of not owing any tax in any jurisdiction.

 

[GlobalWealth]

The end goal is to live 180 + 1 days in a foreign country. That too is using a loophole available to the anyone (but in reality only those with the means/wealth) to 'skirt' the lines of not owing any tax in any jurisdiction.

Be careful here. This varies based on country. In some countries (ie. the US) you become a tax resident after 122 days in the country.

 

[Phones]

Portugal:

23% VAT
23% Corporate Tax
48% personal income tax ( >80k€ )

Because I'm under 200k/annual sales I choose to be a sole proprietorship with simplified accounting, meaning that 15% of my sales are considered profit and then that is taxed as personal income. As my margins are way better than 15%, I'm better of this way, don't need an official accountant. On the other side all liabilities will come under my name, so it is riskier on that part.

 

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[GIlman]

In the US It depends on which state you incorporate in & wether you're a S-Corp or C-Corp.

C-Corp: 0%-35% Federal + State Corp Tax Rate + Obama Care Tax
S-Corp: 0%-20% Federal + State Corp Tax Rate + Obama Care Tax

Personal Income Tax:

Salary: 0%-39.6% Federal + State Income Tax (High Earners Also Pay Obama Care Tax)

Long Term Capital Gains/Dividends/Interest : 0%-20% Federal + State Corp Tax Rate + Obama Care Tax.

I always tell people incorporate in a state with no STATE corporate tax & have your residency in a state with no income tax. Keep salary modest and take the rest in LT Dividends or Distributions.

Also the 15.3% fica/Medicare tax on the first $118K for self-employed. Or half that for employed.

 

[GlobalWealth]

Portugal:
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23% VAT
23% Corporate Tax
48% personal income tax ( >80k€ )

Because I'm under 200k/annual sales I choose to be a sole proprietorship with simplified accounting, meaning that 15% of my sales are considered profit and then that is taxed as personal income. As my margins are way better than 15%, I'm better of this way, don't need an official accountant. On the other side all liabilities will come under my name, so it is riskier on that part.

Portugal has an interesting option for residency. You can apply for the NHR (non-habitual resident) visa and if your income is derived from dividends, you pay no tax in Portugal.

The best way to do this is to set up an offshore company (it is a bit more complicated as you need to be in the right country, but it is doable), and pay yourself only in dividends from the profit of the company.

Voila, no corporate tax from offshore jurisdiction and no personal tax since it is paid in dividends.

 

[Bila]

Well, 'everything' is an exaggeration haha.

My rent is a business expense (home 'office'), my transportation, a good portion of meals away from home, all domestic and international travel, etc

The goal is to operate at or near $0 in net profit, although haven't succeeded at that yet.

I set my take home pay to be below the threshold of having to pay income tax.

So my purchasing power is anywhere from 2x-3x my actual declared income. ($15k declared, $45k actual for example)

I'm just playing the system basically.

It won't be sustainable as my revenues/income increases, but at that point I'll probably be out of the country 180 + 1 days per year to some tax haven country.

Same here....i write everything off as a business expense ...eating out ? Business expense. Cellphone bill ? Business expense, Internet, travel....i even tried once to include my manicures :-( did not work ) ...but you get the idea..... It works for the first 2 -3 years of a business.

 

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[Durete]

It works for the first 2 -3 years of a business.

Then we come to the question: Why doesn't it work after that?

 

[Bila]

Then we come to the question: Why doesn't it work after that?

The idea is to write everything off to the maximum so you are taxed the minimum on the " excess " that you could not write off as business expense.
The gov is ok with minimum " excess " the first 2-3 years ....then they will get suspisious and you could have an audit.......keep in mind that i write almost everything off ... My car is a business expense, my gas, my oil changes are business expense ...etc.
If you can justify everything it's still ok to do it ( my commercial building owner finds ways to justify his hunting trips to the north )

 

[Rawr]

I am looking into S corp and pay myself a salary... then everything AFTER salary is a dividend at the end of the year, at 15%.

 

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[Bila]

@GrumpyCat ..... What the hell is capital depreciation ??

 

[DeletedUser394]

@GrumpyCat ..... What the hell is capital depreciation ??

http://en.wikipedia.org/wiki/Depreciation#Tax_depreciation

 

[Napoolion]

OH wow, I am just doing my business yearly report and it is not so bad then now that I think about it here...

Estonia in numbers:
0% on profit retained in company; flat 20% when earned profit is distributed to shareholders
Payroll tax: 33%

So if you invest the money or write it to costs, it's 0%. If you want to pay yourself wage, it's 33%.

It's 20% if you take money with dividends.


You can become an e-resident here and create a company without really visiting the country shortly. It just came out: https://e-estonia.com/e-residents/about/

 

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[Lathan]

Reading this thread is making me realize I know absolutely nothing about taxes. Literally.

 

[GlobalWealth]

OH wow, I am just doing my business yearly report and it is not so bad then now that I think about it here...

Estonia in numbers:
0% on profit retained in company; flat 20% when earned profit is distributed to shareholders
Payroll tax: 33%

So if you invest the money or write it to costs, it's 0%. If you want to pay yourself wage, it's 33%.

It's 20% if you take money with dividends.


You can become an e-resident here and create a company without really visiting the country shortly. It just came out: https://e-estonia.com/e-residents/about/

I will be in Tallinn next Tuesday doing the e-residency.

 

[jazb]

F*ck it, Im moving to necker island

 

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[Napoolion]

I will be in Tallinn next Tuesday doing the e-residency.

Awesome, if you wanna meet up and eat lunch or something, let me know.