Why risk offshore? Just pay some taxes

[Remy]

No, you are wrong, I'm not anymore resident of my birth country, have no real estate or money in bank there, I transfered all my business when I moved and opened a new limited, so I'm completly taxes clean for the administration of my birth country, without stress. I opened several offshore in different countries, it was perfectly legal in HK. Most of companies listed in the HK stock exchange are registered in Cayman, or BVI....so why not my little business in import/export. I have even not to hide me, according to the territorial regulation of HK.

 

[Tax Cow]

It's always interesting to see people thinking that 25% corporate tax is "fair" ...

This.

25% Income Tax on corporate level is absurdly high. It's so absurdly high it's not even debatable if it's fair or not.

What happens in a typical EU nation:

1. 25% Corporate Income Tax
2. Dividend is paid, corp coughs up 5% more in dividend withholding tax

30% Is gone.

---

3. Individual receiving the dividend pays progressive Personal Income Tax, usually 20% effective rate
4. Individual spends the earnings on goods and services, paying VAT, usually at 20% effective rate

70% Is gone! And this is assuming that the individual can legally live off of dividends only. Some states are aggressive towards this practice and they require some sort of salary or director's remuneration income that would be subject to social security contributions.

---

In one way or another, two thirds of purchasing power is confiscated from the productive who make 100K or more.

Notes: We did not consider sin taxes like driving diesel cars and drinking alcohol, smoking cigarettes etc.

 

[Remy]

This.

25% Income Tax on corporate level is absurdly high. It's so absurdly high it's not even debatable if it's fair or not.

What happens in a typical EU nation:

1. 25% Corporate Income Tax
2. Dividend is paid, corp coughs up 5% more in dividend withholding tax

30% Is gone.

---

3. Individual receiving the dividend pays progressive Personal Income Tax, usually 20% effective rate
4. Individual spends the earnings on goods and services, paying VAT, usually at 20% effective rate

70% Is gone! And this is assuming that the individual can legally live off of dividends only. Some states are aggressive towards this practice and they require some sort of salary or director's remuneration that would be subject to social security contributions.

---

In one way or another, two thirds of purchasing power is confiscated from the productive who make 100K or more.

Notes: We did not consider sin taxes like driving diesel cars and drinking alcohol, smoking cigarettes.

I agree. You are absolutly right. We don't speak of 25 %, but much more in fact in Europe.

 

[jenhuang30]

1. 25% Corporate Income Tax
2. Dividend is paid, corp coughs up 5% more in dividend withholding tax

30% Is gone.

---

3. Individual receiving the dividend pays progressive Personal Income Tax, usually 20% effective rate
4. Individual spends the earnings on goods and services, paying VAT, usually at 20% effective rate


(3) and (4) Are wrong because:
SK Dividends are taxed at 7% and social contribution no progressive taxes
PT 0% for New Non Habit Resident Regine

So effective taxes is 25% + 7% or 25% + 0%

 

[Tax Cow]

@jenhuang30

You're cherry-picking a scenario that does apply to "typical EU nation" I'm talking about. Also the benefits of Portugese NHR regime are valid for 10 years after which your love for this nation will start to fade.

Here's one for you. If you are willing to relocate, why not cherry-pick a 0-5% effective tax burden country outside the EU? Why would you move to Portugal for that 25 + 7% (valid for 10 years)?

If you love Portugal and always wanted to live there, then sure. But even then, move to a 0-5% jurisdiction first, build your business and accumulate wealth over three to five years, and then move to Portugal. Not a better idea?

 

[Remy]

1. 25% Corporate Income Tax
2. Dividend is paid, corp coughs up 5% more in dividend withholding tax

30% Is gone.

---

3. Individual receiving the dividend pays progressive Personal Income Tax, usually 20% effective rate
4. Individual spends the earnings on goods and services, paying VAT, usually at 20% effective rate


(3) and (4) Are wrong because:
SK Dividends are taxed at 7% and social contribution no progressive taxes
PT 0% for New Non Habit Resident Regine

So effective taxes is 25% + 7% or 25% + 0%

Your logic is a bit strange for me. I mean you plan to go to Slovakia in order to be treated better, but you seems not want to move outside from EU, in a country where you could be treated even better than Slovakia (for example) because you are afraid to live in a kind of grey zone. For me, you choose the half full glass. Anyway, that's your choice, it's respectable, but there are so many countries in the world than I don't understand well this restriction.

 

[jenhuang30]

@jenhuang30

You're cherry-picking a scenario that does apply to "typical EU nation" I'm talking about. Also the benefits of Portugese NHR regime are valid for 10 years after which your love for this nation will start to fade.

Here's one for you. If you are willing to relocate, why not cherry-pick a 0-5% effective tax burden country outside the EU? Why would you move to Portugal for that 25 + 7% (valid for 10 years)?

If you love Portugal and always wanted to live there, then sure. But even then, move to a 0-5% jurisdiction first, build your business and accumulate wealth, and then move to Portugal. Not a better idea?

Yes, this is a lovely purpose, however if I am in Europe, it will be so difficult to maintain a structure outside EU with that tax rate. Remember the "substance" issue, offshore regulation, CFS, Commor Reporting agtreement ,etc. A lot of pain and stress... Not sure if its better to pay that 30% and try to make more from EU instead of risking so much and having limited availability to spend that cash into EU.

 

[jenhuang30]

Your logic is a bit strange for me. I mean you plan to go to Slovakia in order to be treated better, but you seems not want to move outside from EU, in a country where you could be treated even better than Slovakia (for example) because you are afread to live in a kind of grey zone. For me, you choose the half full glass. Anyway, that's your choice, it's respectable, but there are so many countries in the world than I don't understand well this restriction.

Thing is that for a EU Passport Holder, going outside EU and then getting back with money is never so easy... Also even outside there are some pains, 15/30% taxes, only -10 countries have no taxes but they have a lot of issues with decent countries in EU about information exhanging, CFC, etc. So I was thinkint about Potugal or Slovakia for 1 year to lower the pain..

 

[Remy]

Thing is that for a EU Passport Holder, going outside EU and then getting back with money is never so easy... Also even outside there are some pains, 15/30% taxes, only -10 countries have no taxes but they have a lot of issues with decent countries in EU about information exhanging, CFC, etc. So I was thinkint about Potugal or Slovakia for 1 year to lower the pain..

I'm also EU Passport holder, you don't need to come back to Europe, and if you choose this way after spending years outside from Europe, of course you could. If you resides in the new country you choose you won't care anymore of CRS... ! They won't report to your birth country. So what if they do ? Anyway, I disagree to consider there are only EU, USA and 10 decent countries to live on our planet, just my opinion. And many countries are much more relax about regulations than EU, even if on the paper these are the same than in EU.

 

[jenhuang30]

I'm also EU Passport holder, you don't need to come back to Europe, and if you choose this way after spending years outside from Europe, of course you could. If you resides in the new country you choose you won't care anymore of CRS... ! They won't report to your birth country. Anyway, I disagree to consider there are only EU, USA and 10 decent countries to live on our planet, just my opinion. And many countries are much more relax about regulations than EU, even if on the paper these are the same than in EU.

Remy, to which country outside EU would you relocate to save for lets say 3-4 years?

 

[GrumpyMess]

Anyway, I disagree to consider there are only EU, USA and 10 decent countries to live on our planet, just my opinion. And many countries are much more relax about regulations than EU, even if on the paper these are the same than in EU.

Living in Hong Kong is not for everyone, it's overpopulated and it's not easy to integrate into society. The same for other tax free or territorial tax countries, or they are shitholes or they are too far from a comfortable lifestyle.

 

[Remy]

I choosed HK to continue the same business than in EU. But if you are free about these things, I will go to Thailand (I love the islands..Kho Samui...) or South Africa (wonderful country, but not suitable for a family), Marocco, Dubai, Mauricious (I love)...so many options

 

[jenhuang30]

Living in Hong Kong is not for everyone, it's overpopulated and it's not easy to integrate into society. The same for other tax free or territorial tax countries, or they are shitholes or they are too far from a comfortable lifestyle.

Yes this is the point, the price to live in a decent place like EU is 30% Taxes.... Also Hong Kong has introduced a new law for substance.

 

[Remy]

Living in Hong Kong is not for everyone, it's overpopulated and it's not easy to integrate into society. The same for other tax free or territorial tax countries, or they are shitholes or they are too far from a comfortable lifestyle.

You don't need to integrate into society, there are many foreigners...I'm sorry, but I don't consider as shitholes countries just because they are different from standarts in developped countries in Europe, in fact, I consider these "shitholes" much more interesting. Anyway, just my point of view.

 

[Remy]

Yes this is the point, the price to live in a decent place like EU is 30% Taxes.... Also Hong Kong has introduced a new law for substance.

Well, when you see HK, you can consider the way is long to normalize all the mess.

 

[jenhuang30]

You don't need to integrate into society, there are many foreigners...I'm sorry, but I don't consider as shitholes countries just because they are different from standarts in developped countries in Europe, in fact, I consider these "shitholes" much more interesting. Anyway, just my point of view.

You have the money in a "shitoles" country..... Stress, gangsters, corruptions, instability etc.... 50% and more taxes is scam but 30% (with the dividend system9 probably is still fair for all the benefits (safe place, Western EU, buy properties, live stress free as it is no hidden money ec)

 

[GrumpyMess]

I will go to Thailand

Thailand isn't a tax free country nor has a territorial taxation system.

You don't need to integrate into society, there are many foreigners...I'm sorry, but I don't consider as shitholes countries just because they are different from standarts in developped countries in Europe, in fact, I consider these "shitholes" much more interesting. Anyway, just my point of view.

"shitholes" not in regards to HK, it's a pretty good country, just not for everyone and hard to get a residency. By "shitholes" I mean countries like Vanuatu or Georgia

 

[Remy]

You have the money in a "shitoles" country..... Stress, gangsters, corruptions, instability etc.... 50% and more taxes is scam but 30% (with the dividend system9 probably is still fair for all the benefits (safe place, Western EU, buy properties, live stress free as it is no hidden money ec)

Wow...stress, gangsters, instability... Sorry, that's funny for me. You know that's when I come back to my home town for holidays that I feel unsecure (I'm serious). Maybe, you watch to much news on TV. Reality is not so bad. But if you are so scared outside EU, maybe it's better for you to choose to pay the price for living there.

 

[Remy]

Thailand isn't a tax free country nor has a territorial taxation system.


"shitholes" not in regards to HK, it's a pretty good country, just not for everyone and hard to get a residency. By "shitholes" I mean countries like Vanuatu or Georgia

Been already in Georgia, I was nicely surprised by this country. Thailand is not a taxes free country, but many business men foreigners don't pay taxes !

 

[GrumpyMess]

Wow...stress, gangsters, instability... Sorry, that's funny for me. You know that's when I come back to my home town for holidays that I feel unsecure (I'm serious). Maybe, you watch to much news on TV. Reality is not so bad. But if you are so scared outside EU, maybe it's better for you to choose to pay the price for living there.

It's very good that you've found a place where you want to live and moreover it's tax free. I haven't found yet. Do you have a social circle there?

Been already in Georgia, I was nicely surprised by this country.

Surprised as a tourist, right? Political instability, lack of beautiful girls, average salary of 400$ doesn't seem to be a good option to live