Easy 0 VAT Jurisdiction Needed

[Allenk]

Hi

I want to run some online ads, and if I select the UK, or any other country, they're charging a 20% VAT on the ad spend.

I'd like to incorporate a company in a jurisdiction that has a 0 rate, like Hong Kong, Dubai, etc.

However, it needs to be cheap and relatively easy to setup a new company.

Question 1: What's the best jurisdiction for this and are there any services that do it affordably?
(A while ago I used a US service to setup a LLC and it was quick and cost like $400, etc.) I'm wondering if there's something similar in a 0 VAT rated jurisdiction.

Question 2: Am I correct that if I setup a Delaware LLC, as per Bei Facebook anmelden, then there's no sales or VAT tax equivalent?

I look forward to your insights! I'm learning so much here.

 

[koohl]

Your problem is that if you, as a customer, do not provide a VAT number, the store must charge local VAT—and if it's outside the EU, they should not charge VAT at all. However, the issue here is that their system cannot handle this, and you end up being charged full VAT—this only applies if you are purchasing as a business.

 

[JohnLocke]

Luxembourg and Switzerland are among the one with the lowest tax rates in Europe.

 

[ShillGates]

i dont get the issue, if fb charges you 20% vat then you claim it back as input tax so net is zero.

or if facebooks bills you from country A, just incorporate in country B inside EU then its also zero and its just paperwork for a vat return

 

[daniels27]

I want to run some online ads, and if I select the UK, or any other country, they're charging a 20% VAT on the ad spend.

Can you maybe explain what you want to advertise? I am asking because in most of the cases, you either have to pay VAT on your sales in UK or you have no UK sales in which case you can register for VAT and claim back all input VAT.

i dont get the issue, if fb charges you 20% vat then you claim it back as input tax so net is zero.
or if facebooks bills you from country A, just incorporate in country B inside EU then its also zero and its just paperwork for a vat return

Yes, or you just use a personal address in Hong Kong for the ad account and the problem is solved.

 

[JohnLocke]

i dont get the issue, if fb charges you 20% vat then you claim it back as input tax so net is zero.

or if facebooks bills you from country A, just incorporate in country B inside EU then its also zero and its just paperwork for a vat return

I totally agree with you, not sure what OP try to achieve.

 

[clemens]

How would you invoice people with 0 VAT if you run a business in Europe, I say impossible!

 

[daniels27]

How would you invoice people with 0 VAT if you run a business in Europe, I say impossible!

His problem is not the invoicing. His problem is that Google charges him VAT when he is using an EU company. If he spends 1000 on ads, he needs to pay 1200 with his UK company. He wants to save the 200. So far so good, but if he just registers for VAT, he can completely reclaim the VAT. However, he may be under the sales threshold and we are talking about saving 200 GBP per year only.

Hence, either he did not understand the concept of VAT or he understands it very, very well and is beating the system one way or the other. We do not know. As there are several ways to beat the system, we can only try to help him:
- if he is a position where he does not need an invoice to lower the net profit, he can run the ads on somebody else's company or a private address in Hong Kong, etv.
- if he is does need the invoice for deduction of business expenses (only CIT, not VAT), he will have no choice than to incorporate outside EU, CH, etc. Hong Kong, US, etc. would all work.

 

[JohnLocke]

Hence, either he did not understand the concept of VAT or he understands it very, very well and is beating the system one way or the other.

I think this is the answer to the question.

 

[alain]

His problem is not the invoicing. His problem is that Google charges him VAT when he is using an EU company. If he spends 1000 on ads, he needs to pay 1200 with his UK company. He wants to save the 200. So far so good, but if he just registers for VAT, he can completely reclaim the VAT. However, he may be under the sales threshold and we are talking about saving 200 GBP per year only.

so you are low on cash if you try to avoid VAT for 200 GBP a year

 

[Marshal]

so you are low on cash if you try to avoid VAT for 200 GBP a year

Every penny counts

 

[daniels27]

so you are low on cash if you try to avoid VAT for 200 GBP a year

Every penny counts

Yes, as mentioned the issue only arises if you are below the VAT threshold. Luckily, I also pointed out the solution to his problem earlier:

Yes, or you just use a personal address in Hong Kong for the ad account and the problem is solved.

 

[alain]

Every penny counts

getting into troubles for 200 GBP is not worth it at the end of the day it can costs you 10 times the amount in fines and troubles.

 

[EliasIT]

OP what did you decide to do with the company, where to place it ?

 

[daniels27]

OP what did you decide to do with the company, where to place it ?

As always, he posted a message. We wrote long answers and he never logged in again.

 

[dany]

yes big problem. We don't get answers always.

Does someone know what country would fit such requirement of 0 VAT ?

 

[daniels27]

yes big problem. We don't get answers always.

Does someone know what country would fit such requirement of 0 VAT ?

As we explained many times above, the 0% VAT most likely does not make sense. As you ask, could you maybe explain what you need such country for? And to you question, I would recommend some US LLC.

 

[dany]

I want to avoid charging my customers VAT while the competitors have to do that.

 

[daniels27]

I want to avoid charging my customers VAT while the competitors have to do that.

VAT is charged on the customer's location not yours.

You can incorporate in Norway with 25% and (illegally) sell to Sweden without charging VAT. The EU laws clearly won't allow this but yes, you are less likely to be caught than a EU company.

From that illegal perspective of flying under the radar, any country where your customers are not located would do the job.

 

[bubbledouble]

As always, he posted a message. We wrote long answers and he never logged in again.

You forget that there are lot's of people reading these threads also new members arriving to the forum, good answers helps everyone looking for the right answer.