do you pay tax on company profit?

[realcat]

you set up company in country where you don't owe anything for income generated abroad.
Back in your country of residence in Europe, do you pay tax on this company profits ? Even if money stays in company account. Or tax is to be paid on money that is paid out to yourself? (as an employee of your own company)

Another question i want to know, do you have to do all the heavy paperwork and accounting for your offshore company to file to authorities at country of residence?

 

[negon]

Most often people don't pay tax on money that stay in the company. If you consult a local accountant he could even help you to sort it out with the tax office if you get any troubles.

That said, personally I don't let anyone know about my setups and don't pay any tax from what the company earns at all!

Again, in most offshore jurisdictions you don't have to do any accounting, even though some have started to ask you to sign a document that explains where the books are kept no one iwll ever check this at all. You take money out of the company as you like and forget about any accounting.

There are places i.e. Cyprus where it is different.

 

[realcat]

question was in situation when your home country knows about your offshore company and you want to legally minimise tax bill.

Regarding accounting, i know this may be different from country to country, but do you normally need to do any accounting for your offshore company AT HOME , do you think local tax man will ask accounting docs for offshore comp.

 

[negon]

Yes if you tell them you have an offshore company at XYZ offshore jurisdiction they will require you to show them a balance sheet or something, if not they will simply ask for bank statements and set the tax of all the companies income, most often at least.

If you consider a offshore company and you want to setup everything legit (which is okay and done by many) you will calculate with an CPA locally to help you.

 

[suzy]

You need an CPA that knows about International offshore companies and that is willing to help you. Most of the large accounting and law firms won't touch you. find some small 2 -3 staff operation that is certified in your country. don't forget to agree to a fixed fee.