Gibraltar Company with Polish+Cypriot Bank Account - Please Help

[matan]

Dear Offshorers,

I have an online shop, and I was paying tax in Israel in 2015-2016. I left Israel in 2017 and moved to Poland. Right now I'm tax resident of Poland (more than 183 days in Poland).

I've opened a Gibraltar company and managed to get Cypriot and Polish bank accounts for the company (took me around 1 year of sending documents back and forth). Cypriot bank account cannot provide USD debit card (and my shop is in USD), so I opened the Polish one that can provide USD debit card.

The idea was that the Gibraltar company will earn all the profits, and I will be paid dividend once a year to my personal bank account in Poland and I will report it.

The issue now, is that I am worried Poland will decide that the effective management on the company is based in Poland (the fact that it has bank account in Poland makes it more visible and easier to find out), and therefore, will be taxed as a Polish company (19% corp tax, 19% dividend tax, 23% vat for Europe sales). That could actually put me in loss (23% vat is from revenue, and my profits are around 15% from revenue).

Do you have any idea how do I solve this issue? Can I just pay 19% tax for all the company profits somehow? Can I somehow only pay dividend tax without company will be considered Polish?

I am willing to move out of Poland to any other European country if that's the solution. I am just very confused and tax lawyers and accountants here don't really know how to deal with the situation.

Thanks!

 

[mnschwarz]

Poland has had CFC laws in place since January 2015. So yes if you are the sole owner of the company and a tax resident of Poland, your company could be taxed as though it is Polish. I believe Poland's CFC laws don't apply if the company has an income below EUR250,000 though. It's something you need to clarify with a professional.

If you are caught in the CFC laws & you're willing to move, look for a country without CFC laws as a basic start. The location of the bank account doesn't affect taxes but with the AEOI they will report to your country of residence. You can also look at having a Foundation (with nominees) own and manage the company to remove yourself from the structure. Banking can still be difficult with AEOI jurisdictions if you want to retain control of the bank account though. Or you can look at going the anonymous route using darks.

 

[matan]

Poland has had CFC laws in place since January 2015. So yes if you are the sole owner of the company and a tax resident of Poland, your company could be taxed as though it is Polish. I believe Poland's CFC laws don't apply if the company has an income below EUR250,000 though. It's something you need to clarify with a professional.

If you are caught in the CFC laws & you're willing to move, look for a country without CFC laws as a basic start. The location of the bank account doesn't affect taxes but with the AEOI they will report to your country of residence. You can also look at having a Foundation (with nominees) own and manage the company to remove yourself from the structure. Banking can still be difficult with AEOI jurisdictions if you want to retain control of the bank account though. Or you can look at going the anonymous route using darks.

Thanks for the response, but actually I am not caught in the CFC rules, because CFC in Poland is for tax havens and passive income (not my case, Gibraltar is not considered tax haven in Poland). But I am caught in the "effective management" rule. My Gibraltar company has nominee directors and shareholders, but still I am the UBO and I run the bank accounts.

 

[mnschwarz]

Thanks for the response, but actually I am not caught in the CFC rules, because CFC in Poland is for tax havens and passive income (not my case, Gibraltar is not considered tax haven in Poland). But I am caught in the "effective management" rule. My Gibraltar company has nominee directors and shareholders, but still I am the UBO and I run the bank accounts.

CFC laws usually include the effective management of a company. Sounds like Poland splits them up in to two laws but it's the same advice as originally stated. Move, expand your structure or go with darks. You could also find a different bank account that isn't part of the AEOI list. But this isn't actually solving your problem legally; it's just preventing you getting reported.

Also, I would look for a better tax lawyer/accountant if the ones you've spoken to don't know. It's their job to know....

 

[matan]

thank you, can you explain what is "darks" or send me to some explanation thread?

 

[mnschwarz]

thank you, can you explain what is "darks" or send me to some explanation thread?

Essentially it is using falsified documents to create a fake identity. It isn't an area of expertise for me however so I prefer to refer people interested to @auric and I believe there is a lot more information in the mentor group if you upgrade.

 

[sialala]

Got same problem. Fu*** polish taxes and vat gets Your whole earnings.

 

[incognith0]

what type of business you manage ? Sales ,services , financial or so? How big is the turnover ?

 

[negon]

What was the outcome of all of this at the end of the day OP ?

 

[Okanda Fernando]

Provide more information about your business please. Then we can find a exact solution