E-commerce opened 1 year ago in EU but too high taxation

[Verdena7]

Good morning everyone
I'm here to ask for an opinion and advice from you more experienced about my situation.

I opened an e-commerce in 2021 which has a turnover of around 200k euros / year.
In the meantime I have a stable remote job as an employee.
I am a resident of the EU in a southern country where taxation is very high. Especially now that I work as an employee and I have my e-commerce, the incomes add up and are in a very high range for taxation.
Continuing in this situation wouldn't make sense since I would pay a lot of taxes.
The point is that I don't want to choose between my e-commerce and working as an employee at the moment as I am currently able to do both.
This is why I was thinking if it was worth the risk of moving my e-commerce to a lower taxation country and in the meantime continuing to work as an employee. I would basically continue to pay taxes as an employee in my country of residence, hiding the incomes of the e-commerce in another country.

Do you think it is feasible?
I still have no idea which country would be more convenient, taking into account the costs of opening and maintaining the company, bank account, etc ...
Other key requirements would be the possibility of being able to work with and receive payments from Stripe and Paypal, to be able to receive invoices from my product suppliers and marketing agencies.

hope someone could give some suggestions

 

[Marzio]

hiding the incomes of the e-commerce in another country.

There's no legal way to hide income earned in another country.

The only way to make it work is to hire staff in a lower taxation country to operate the eCommerce on your behalf but this means hiring staff, paying salary, rent office space and so on.

And even if you agree to hire staff your tax residency country may consider the offshore company as a CFC and tax it like it was a resident company.

Also since you said you are from southern Europe i presume you are either from Spain or Italy.

Those are one of the most aggressive tax administrations out there.

And now, after COVID, they are looking any possibile way to get money from their tax residents.

 

[Verdena7]

There's no legal way to hide income earned in another country.

The only way to make it work is to hire staff in a lower taxation country to operate the eCommerce on your behalf but this means hiring staff, paying salary, rent office space and so on.

And even if you agree to hire staff your tax residency country may consider the offshore company as a CFC and tax it like it was a resident company.

Also since you said you are from southern Europe i presume you are either from Spain or Italy.

Those are one of the most aggressive tax administrations out there.

And now, after COVID, they are looking any possibile way to get money from their tax residents.

Well I'm aware that such move as described wouldn't be legal, but what I thought was that since I'm an employee I would continue to pay consistent taxes. I thought that such position would avoid me to be under the spotlight of the tax agency

 

[johndunham]

Don't forget to send us the address of the penitentiary facility you'll be located. I'll send a post card!

Edit: e-commerce with 200k/year turnover. I guess 15-20% gross margin (correct me if I'm wrong). You'll be saving crumbles in taxes. Not worth the hassle.

 

[Verdena7]

Don't forget to send us the address of the penitentiary facility you'll be located. I'll send a post card!

Edit: e-commerce with 200k/year turnover. I guess 15-20% gross margin (correct me if I'm wrong). You'll be saving crumbles in taxes. Not worth the hassle.

Gross margin is around 55-60%

 

[johndunham]

Edit: never mind. Since you know that what you want to be doing is illegal, I won't comment any further.

 

[Marzio]

I thought that such position would avoid me to be under the spotlight of the tax agency

This is wishful thinking, as soon as they will find out that you have a bank account in another contry with non declared profits in your country they will f**k you from the back using sand as lubricant.

Either you move or hire staff offshore.

No other (legal) solutions are possible.

 

[forbidd3nknowl3dg3]

Good morning everyone
I'm here to ask for an opinion and advice from you more experienced about my situation.

I opened an e-commerce in 2021 which has a turnover of around 200k euros / year.
In the meantime I have a stable remote job as an employee.
I am a resident of the EU in a southern country where taxation is very high. Especially now that I work as an employee and I have my e-commerce, the incomes add up and are in a very high range for taxation.
Continuing in this situation wouldn't make sense since I would pay a lot of taxes.
The point is that I don't want to choose between my e-commerce and working as an employee at the moment as I am currently able to do both.
This is why I was thinking if it was worth the risk of moving my e-commerce to a lower taxation country and in the meantime continuing to work as an employee. I would basically continue to pay taxes as an employee in my country of residence, hiding the incomes of the e-commerce in another country.

Do you think it is feasible?
I still have no idea which country would be more convenient, taking into account the costs of opening and maintaining the company, bank account, etc ...
Other key requirements would be the possibility of being able to work with and receive payments from Stripe and Paypal, to be able to receive invoices from my product suppliers and marketing agencies.

hope someone could give some suggestions

As already mentioned, there is no legal way to hide money from the taxman. Hiding money requires you to lie on a tax return which equals tax evasion, not legal tax avoidance.

If your ecommerce business continues to grow, and you still want to avoid taxation in your current residence jurisdiction, you will haft to look into changing your residence (and most likely quit your current job).

 

[Gravity]

Good morning everyone
I'm here to ask for an opinion and advice from you more experienced about my situation.

I opened an e-commerce in 2021 which has a turnover of around 200k euros / year.
In the meantime I have a stable remote job as an employee.
I am a resident of the EU in a southern country where taxation is very high. Especially now that I work as an employee and I have my e-commerce, the incomes add up and are in a very high range for taxation.
Continuing in this situation wouldn't make sense since I would pay a lot of taxes.
The point is that I don't want to choose between my e-commerce and working as an employee at the moment as I am currently able to do both.
This is why I was thinking if it was worth the risk of moving my e-commerce to a lower taxation country and in the meantime continuing to work as an employee. I would basically continue to pay taxes as an employee in my country of residence, hiding the incomes of the e-commerce in another country.

Do you think it is feasible?
I still have no idea which country would be more convenient, taking into account the costs of opening and maintaining the company, bank account, etc ...
Other key requirements would be the possibility of being able to work with and receive payments from Stripe and Paypal, to be able to receive invoices from my product suppliers and marketing agencies.

hope someone could give some suggestions

Given the goal you are trying to achieve, the plan you outlined won't be fun for a long time. Since you are planning to stay in Southern Europe (I'm guessing Italy), your plan is not going to work - taxes are to be paid where the center of operation is. Depending on the risk appetite and especially on the goods you are selling, there might be ways to reduce the taxation substantially without sweating at night, though I can't give you a general statement without knowing exactly what you are doing.

 

[BrianTan]

As others have mentioned above, I think it's a little risk, either. BUT, I have a tiny piece of advice for you in this situation. Try finding an incorporation agency - just to talk to them about what you think of (it’s free and they’re all willing to help - I’ve done this before).
You can also research 'offshore company' to clear up your queries, or just directly ask any agencies you’ve found. Good luck!

 

[Larin]

There seems to be an recent uptick in people asking for ways to evade paying taxes, which is illegal. I doubt there will be too many users on here who will be able to advice you on that.
If you are asking whether you can set up a company in a low-tax jurisdiction and just continue paying taxes on your employment income, while not declaring any income from your business which is registered abroad, then the answer is: legally no; and illegally, sure just as you can do anything else that's illegal. It works, until it doesn't.
One legal way to reduce your tax burden would be to move to a different country with the lower tax rates.