Buying a car in Europe with a offshore bank account

[Frank N Stein]

As a 23 year old, I gratefully have the luxury to buy whatever the f**k i want, and i wont ever regret it.
Anyway, that's off topic, Anyone still has any idea what would be the best option for this purchase?

Kids these days, they think working hard for 2 to 3 years is already a sacrifice. They can't fully grasp the concept of delayed gratification.

 

[22kay]

Thanks for the clarification. It is well known that Italy has extortionate taxes on “luxury vehicles”. So of course many Italians register their cars abroad to save money.

But VAT? You say you buy without VAT, but sell with VAT.
VAT in Bulgaria is 20%, so if you buy for 230k (net) and sell for 150k (gross), you’re really selling for 125k. So you pay 105k over 4 years, or about 26k per year in depreciation.
I guess that’s pretty normal or even on the low side as I think most cars lose about 50% of their value over the course of 3 years - and here it’s under 50% over 4 years.
Anyway, that loss of value would be an expense in any other country as well.
Or are you comparing owning the car through a company with owning it as a private individual? Of course, as I private individual, you have to pay the VAT. And when you sell it, you can’t declare the VAT, so you get to pocket the full amount, but it might be more difficult to find a buyer. So as a private individual, you would be looking at 300k vs 150k - a 150k difference. So I agree that it would of course make more sense to buy as a company.

Why is maintenance so much cheaper if the car is owned by a Bulgarian company? Do Italian garages charge 100% extra taxes on repairs if it’s an Italian car?

I’m just not sure if this all makes sense if you don’t live in a country like Italy that has these excessive taxes.
If you lived in Sweden for example (just to give an example from a high tax country) and just bought the car through your company, there also would be no VAT to pay.
Also I think you’re lucky if Italy never out an end to your scheme. For example, residents of Norway (Norway has a tax of about 100% on almost all kinds of cars) are not allowed to drive foreign-registered cars at all. You can’t even rent a car from Sweden. If they catch you, they just take the car away and demand the taxes, even if it’s not your own car. The only exception would be if you move house or something like that, but even then you have to declare to the customs when you entered the country with your Swedish rental car and when you left again. And this can only be for a few days and specific purpose.

Anyway, I think what really would be interesting is buying the car through an Isle of Man company. I have heard that all the billionaires buy their private jets and yachts through leasing companies there, so basically the same setup that you have with Bulgaria. The reason is that they don’t pay VAT when they buy the car as usual, but when they sell it (with VAT), they can just keep the full amount and don’t have to pay the VAT to the tax office. But I’m not sure if that’s still possible, I read that the EU is trying to close the loophole.

Just a correction, if you buy a car through your company in Sweden, you will pay 100% VAT, unless it's a specific work car, registered for specific work (tractor, truck, etc.). If you lease a car through your company, you will be able to deduct 50% of the VAT on the actual lease cost.

 

[JustAnotherNomad]

Thanks for the clarification. I just chose Sweden as a random example, shouldn’t have done that without checking the facts.
I guess what I wrote would still be true for most other countries, though. If the car can be used for private purposes, you will probably be taxed for the potential private use on a private level (like the car being a fringe benefit), but the purchase itself should be VAT exempt.

 

[22kay]

Thanks for the clarification. I just chose Sweden as a random example, shouldn’t have done that without checking the facts.
I guess what I wrote would still be true for most other countries, though. If the car can be used for private purposes, you will probably be taxed for the potential private use on a private level (like the car being a fringe benefit), but the purchase itself should be VAT exempt.

Yes, that is also correct and applicable for Sweden; the actual "personal benefit" of having a car leased by the company, will be added on top of your income. And (oh no, it doesn't stop here) if the company is paying for the gas, you need to pay tax on top of the gas used for private trips. So what's the fuss with the VAT? Well, it's 25%. So, as you wrote, high tax country it is and cars should be somehow exempted with all the taxes, except for this very clever Swedish system to pick as much tax as possible on a thing used so much (well, maybe not these days...). Sorry for taking this so far...but it's really crazy.

 

[JustAnotherNomad]

How would they know how many private trips you’ve taken?
I guess it might be cheaper to buy the car on your name and then reimburse yourself for every time you use the car for your company since that would be a deductible business expense.

I believe it’s even worse in Estonia, though I don’t remember the details. I’ve just heard that basically nobody buys a car on their company there because the taxes are crazy.

 

[22kay]

How would they know how many private trips you’ve taken?
I guess it might be cheaper to buy the car on your name and then reimburse yourself for every time you use the car for your company since that would be a deductible business expense.

I believe it’s even worse in Estonia, though I don’t remember the details. I’ve just heard that basically nobody buys a car on their company there because the taxes are crazy.

You need to keep a drivers journal on every trip you've taken and it needs to state from, to, when, and if for work - a specification.

 

[JustAnotherNomad]

Horrible. Definitely better to buy it on your own name then and bill the company. Though I guess you could try to make stuff up.
Other countries as least give you the option to keep a journal or pay more in taxes.
I’m glad I’ve left the EU.

 

[JohnLocke]

As long as you live within the EU I don't think you should buy any car with an offshore bank account if you goal is to avoid any taxes or use black money to buy the car. You will fail.

 

[joseph15]

Lets say you are a newcomer to the EU and never lived there before and want to buy a luxury car, and you say that the source of the money is from savings you earned while living elsewhere. Will that work (in terms of staying under radar not reducing costs)?

 

[ikan]

Buy Luxury car with off shore Account :
Tip to all nationalites. Not valid for french guys.

••• Do like the world wide Super Rich •••
Go to Monaco - Monte Carlo
Buy there your new or second hand car with local super car dealer (big choice), keep registrated plate in Monaco.
The super cars dealers should help to proceed all steps, payments gateaway, probably introduce to local bankers, law adviser, else....if needed.
They do that all year long for their exclusive high end customers !

You will keep below radars.
Monaco got thousands of registrated Super Cars and hundreds of Super Yachts.

Super Rich have same needs and problems like yours.
They do it in Monaco (few others in Swiss).

Not valid for 50Ke car value.

 

[JustAnotherNomad]

What would be the advantage with having a car registered in Monaco...?

 

[ikan]

@JustAnotherNomad : I'm sorry I can't reply. Super Rich know and do it for last 3 decades.
Myself to keep below radar I simply own 1ke scooter (no car). But I know tales on boating and yachting... Lol... I prefer waisting money boating rathers than cars...

I can add about Monaco : it had become Grey Market for Vintage Luxury and Surper Cars. Suitcase loaded with cash exchange in hands between world wide buyers and sellers for thoses Vintages with the good will compliance of the local car dealers taking their commissions in cash or legit way !

 

[JustAnotherNomad]

The obvious advantage with Monaco is that there are no taxes if you can afford to live there. If they accept lots of cash, I’m sure that’s a great benefit for some people as well.

But the way I understand it, there are no other benefits to buying a car there as a non-resident?

 

[Jade33]

for the cars I use a precise scheme, I open a normal LTD in Bulgaria, with which I declare my will to rent the owned cars.
If the funds with which you open and funds the company come from your private account it is not a problem, if they come from another person or from another company, just make a non-interest bearing loan contract.
If you do not want to make strange statements, just need to pay the 10% offshore flet tax on the contributions received.
Then I rent them to the natural person or to the company, I pay a minimum of taxes on the contract (like € 1000 per year) I pay 10% of taxes in Bulgaria (€ 100), and on condition that I do not have offices of the Bulgarian company that rents in other states in europe, there are no problems (the law says that if the rental company is also based in another state, such as Hertz, Avis etc., when you are in the other member state you have an obligation to nationalize the car and therefore change the license plate, this obviously does not happen if the Bulgarian company does not have other offices in Europe), from 2009 to today, they have stopped me many times, both to me and to my customers, but I have never received any fine or report .
The main rule of who has the money says that if you can afford it, pay taxes, but if you consider that when you buy the car you do not pay VAT because it is a vehicle that you then rent again, the vehicle management fees are very low, you immediately realize that if for example you take a 100K car in a state like Italy or Malta, within 3 \ 4 years you would have bought back another one with the costs and taxes you have to pay, also if you consider that in the rental fee you can insert, fuel, maintenance and pimps, you can decide to divert the management funds (taxes, stamp duty and insurance) for example on vehicle maintenance, fuel, tires.
Example I pay a 300k Lamborghini 20% less (besides the discount because you are a car rental) so let's say that I pay 230k between discount and VAT.
Give tax and stamp insurance in BG I pay about 1500 € per year with the kasco.
If I had to do the same thing in Italy, I would pay at least 17k a year, in Malta it will impossible in my opinion for the plate cost (like the same cost of the veicle).
So between tax savings, management savings and the fact that you can charge rental invoices like a cost, you can easily reach profit in this management.
How much is lamborghini worth after 4 years?
Let's say 150k, plus the savings accumulated in 4 years (another 60k) in fact you would find yourself in a condition to resell the vehicle and earn it or if you decide to keep it you will go on using it, and when you get to the 6th year, you will probably have that car all repaid with the savings you had in management.
Here is my experience

It is true that going around with a nice car with a Bulgarian license plate, not always decent, but between the savings on stamp duty and insurance, the absolute lack of tax burden on the person and obviously the ease with which you can regularly redo the contracts, the many fines that do not make because it becomes difficult to notify, for me my machines will always remain Bulgarian, it pays a lot.
(I do the comparison between Italy, Malta, Bulgaria, Lithuania, Estonia, Germany, I have never made comparisons with other states)

Lambo with GB plates defintely screams Gipsy mafia , Nobody will bother you

Perhaps driving eastern eu plates won't bring much attention in eu like before as most countries are flooded with migrants from ukraine and neighouring countries. I see an increase in these plates even locally so police won't check as much imo

 

[BusinessOne]

Buy Luxury car with off shore Account :
Tip to all nationalites. Not valid for french guys.

••• Do like the world wide Super Rich •••
Go to Monaco - Monte Carlo
Buy there your new or second hand car with local super car dealer (big choice), keep registrated plate in Monaco.
The super cars dealers should help to proceed all steps, payments gateaway, probably introduce to local bankers, law adviser, else....if needed.
They do that all year long for their exclusive high end customers !

You will keep below radars.
Monaco got thousands of registrated Super Cars and hundreds of Super Yachts.

Super Rich have same needs and problems like yours.
They do it in Monaco (few others in Swiss).

Not valid for 50Ke car value.

Can that be done if you don't reside in Monaco and live in another EU country? Buying a car with cash in Monaco, getting Monaco license plates and then have it in another EU country without issues?

I have seen some guys in Spain who own supercars with Monaco license plates.