Buying luxury cars with undeclared money (EU)

[BusinessOne]

Hi, I have been told multiple options to buy luxury cars or property in an EU country, without having to declare or pay the high tax on the money in such country, but I would like to know if they are viable and safe.

I currently reside in a southern Europe country with high taxes and VAT, and would like to spend most of the year in it.

*Option 1: Lend the money to yourself from a company in an offshore country. (Will it not trigger an alert in the local tax office if someone buys a Lambo, even if it is with a loan?)

*Option 2: Buy the car in the name of a company in a low tax EU country. (Romania, Monaco, Bulgaria, etc) Then rent that car for a low monthly fee and use it in the high tax country. (This would probably make insuring the car harder?)

*Final option: If the above don't work, go to live 1 year to a zero tax country, declare the money there and then go back next year to the high tax country and buy things with that money

Not sure if all or any of these options are safe and viable in the real world.

 

[koohl]

*Option 1: Lend the money to yourself from a company in an offshore country. (Will it not trigger an alert in the local tax office if someone buys a Lambo, even if it is with a loan?)

Will not work unless the offshore company indeed belongs to a 3rd party and you have all your documentation in place. That part alone will cost you 20- 30K EUR for a lawyer and tax advisor to handle. After you managed the paper work, you will have to show that you can afford to pay back the loan from your salary!

*Option 2: Buy the car in the name of a company in a low tax EU country. (Romania, Monaco, Bulgaria, etc) Then rent that car for a low monthly fee and use it in the high tax country. (This would probably make insuring the car harder?)

Most countries will not allow it. You will get huge penalties if you do so.

Unless you live in Dubai or Turkey you can forget about all such "smart a*s" solutions, they will not work long term, sooner or later they will get you.

 

[CyprusLawyer101]

How was your money made and in whatform do they remain nundeclared?

 

[BusinessOne]

How was your money made and in whatform do they remain nundeclared?

From an online business, received between multiple bank accounts and Bitcoin.

Will not work unless the offshore company indeed belongs to a 3rd party and you have all your documentation in place. That part alone will cost you 20- 30K EUR for a lawyer and tax advisor to handle. After you managed the paper work, you will have to show that you can afford to pay back the loan from your salary!

I have heard some people making it sound easy like: "Set up a company in Estonia with a friend, lend the money to yourself and go buy property without any reported income while living in a high tax country". But I guess it isn't so.

 

[Eldubb]

Unless you live in Dubai or Turkey you can forget about all such "smart a*s" solutions, they will not work long term, sooner or later they will get you.

Why Turkey?

 

[JohnnyDoe]

Charter a helicopter. You will have more free time to satisfy your need for speed in a circuit (which you can usually reach directly by helicopter), where nobody will annoy you.

 

[JimBeam]

Can you explain what actually are you trying to do here?

1. Launder your dirty money?
2. Buy an expensive car to show off?
3. Buy a rental property with dirty money to create some cash flow?

Also, what kind of money we are talking about?
100k, 500k, 1M, multipleM?

 

[Willblack]

In most Eastern European countries nobody will ever bother you to "prove that you can pay back the loan" if it's from a company / individual and not a bank.
But there is an even easier route...buy the car in cash (unless we are talking 1m+ car). You can easily do that even in some western EU countries like Germany (for sub 100k cars).
If the car is something flashier, simply finance it / lease it (there are many shady car lease / finance companies in Europe who will gladly charge u 10% interest and not ask questions how you pay the lease).
The biggest problem is that if you have no / low income and you register, say an Aventador in your name, you will get a tax audit...everywhere. You can completely avoid this by leasing the car instead and never acquiring it.

 

[JimBeam]

The biggest problem is that if you have no / low income and you register, say an Aventador in your name, you will get a tax audit...everywhere. You can completely avoid this by leasing the car instead and never acquiring it.

To make thing simple: if you don't have 5M in your bank account (legit cash) - don't buy or lease Aventador.

If you really want Aventador, go to Dubai, rent it for a month, realise it's interesting but also stupid car for daily use (from my persional experience), return the car, go back to your country, move on with your life. If you like it - then stay there and probably nobody will ever ask you where did you got the money from.

Again, back to my questions from above - not sure what's your goal.

 

[peter taradash]

If you want to stay out of trouble and have minimal contact with bureaucrats and tax collectors, adapt to the part of the PT philosophy that you can use. One of the best PT maxims is to keep a low profile . This means, obviously don't drive a flashy car in your home country. In Italy, France and other EU countries anyone with an expensive car is always stopped by cops who do a computer check on whether that person has paid taxes in line with their lifestyle. A car's value might be assumed to represent the driver's annual income. If you ever want to splash out do it abroad where as a rich tourist the "authorities" won't care about what you are spending. Another saying of the Perpetual Paper Tourist is "If You can drive it, sleep in it or with it, RENT IT."

 

[koohl]

Charter a helicopter. You will have more free time to satisfy your need for speed in a circuit (which you can usually reach directly by helicopter), where nobody will annoy you.

That may be more expensive than buying a Ferrari!

 

[BusinessOne]

In most Eastern European countries nobody will ever bother you to "prove that you can pay back the loan" if it's from a company / individual and not a bank.
But there is an even easier route...buy the car in cash (unless we are talking 1m+ car). You can easily do that even in some western EU countries like Germany (for sub 100k cars).
If the car is something flashier, simply finance it / lease it (there are many shady car lease / finance companies in Europe who will gladly charge u 10% interest and not ask questions how you pay the lease).
The biggest problem is that if you have no / low income and you register, say an Aventador in your name, you will get a tax audit...everywhere. You can completely avoid this by leasing the car instead and never acquiring it.

That's the problem, once you try to insure it and register it in your home country it might trigger an alert. If it could be registered in another EU country it would be safer, or with another setup like the loan or after having declared the money abroad.

If you want to stay out of trouble and have minimal contact with bureaucrats and tax collectors, adapt to the part of the PT philosophy that you can use. One of the best PT maxims is to keep a low profile . This means, obviously don't drive a flashy car in your home country. In Italy, France and other EU countries anyone with an expensive car is always stopped by cops who do a computer check on whether that person has paid taxes in line with their lifestyle. A car's value might be assumed to represent the driver's annual income. If you ever want to splash out do it abroad where as a rich tourist the "authorities" won't care about what you are spending. Another saying of the Perpetual Paper Tourist is "If You can drive it, sleep in it or with it, RENT IT."

I didn't know about the check, thanks for the advice. I have seen guys like Andrew Tate buying and registering cars in the UK, while not paying any taxes there because he's a resident of another country (Romania), but I guess it's risky for a normal person.

I also see many guys in my home country with supercars with license plates of Switzerland, Andorra, Germany and so on, but they might be going back and forth periodically to keep it legal.

 

[JohnnyDoe]

That may be more expensive than buying a Ferrari!

I pay my helicopter round trips in Europe on a beautiful AW109 €5-8k. I save 2-4 hours compared to the same trips by car. It’s a no-brainer for me.

 

[void]

helicopter round trips in Europe on a beautiful AW109 €5-8k

what distance/route and how many people?

 

[JohnnyDoe]

what distance/route and how many people?

Typically 10-40 min per leg, 1-3 pax. But it all depends on positioning the aircraft, that is how far you are from its home base.

 

[no1d]

For the same reason, I registered my 100k car in Germany, a friend put me on his home address.
I wonder if German tax authorities will ever ask me about my car. I don't have any bank account, job, phone number in Germany.

 

[JimBeam]

For the same reason, I registered my 100k car in Germany, a friend put me on his home address.
I wonder if German tax authorities will ever ask me about my car. I don't have any bank account, job, phone number in Germany.

If it's a german car - no issues?
If it's Italian, American or Japanese - watch out

 

[princeofprofits]

Is it possible to register the car under a logistics corporation in Germany? Very common practice in North America. The added benefit is there is no name attached to the licence plate.

Additionally, investing as a minority partner in a small dealership would be a profitable venture. Recent inflation has increased values in older obscure German cars and buyers all over the world source older cars from Germany and Japan.

 

[Konstanz]

Living in high tax country and not paying tax will lead you to jail and wealth/assets confiscated
None of your ideas would work long term. You will be in trouble

 

[JohnLocke]

For the same reason, I registered my 100k car in Germany, a friend put me on his home address.
I wonder if German tax authorities will ever ask me about my car. I don't have any bank account, job, phone number in Germany.

I am investigating the same thing, there is a form you need to fill out 'Erklärung zum Empfansbevollmächtigeten' - you must submit it at the KFZ Zulassungstelle in the city where the car is registered. Your friend just has to sign that he is responsible for sending all fines, tax collections, etc., to you. Then what you are doing is completely legal. At least in Germany.

If you want to discuss this further, you should open a new thread.