Invoice German Companies through UK Ltd -> Isle of Man Holding

[drn]

Hi!

I just asked some time ago about the US LLC. I still haven't decided if I want to go with it. As I see two potential problems with it, first of all, german companies could have a problem to deduct a LLC invoice (I heard only rumors, what do you think?) and it can be seen potentially as a "Partnership" which could make me tax liable. So the worst case would be, that in some years a company is audited, then they would find my LLC invoices, would find it fishy and start to argue with the company that they can't deduct it, then the company would say no, it's a real freelancer have a look here, ask me maybe for help and then it could spark a discussion into if the LLC is a corporation or a partnership, there are like a couple of points to check, and if I would go with a member-managed LLC, the first check would be in favor of a partnership as there is no manager. Does it make sense?

So another idea I have is setting up an UK Ltd. that can invoice in Germany and suck out the profits through a Isle of man Ltd. so that the corporation tax goes from 19% to 0 %. Is this possible? Are there better options that you know? I need to have a reputable invoicing company, that is not looking suspicious by any means, but I would like to stay 0% taxed.

Can you file all the forms by yourself, would be easy enough?

I checked the annual filing fees for a UK Ltd. are 13 pounds and for the IOM Ltd. 99 pounds.

Other idea would be also UK Ltd. -> US LLC -> me.

I'm open to your ideas and notes!
Thank you!

 

[Corno]

Hi!

I just asked some time ago about the US LLC. I still haven't decided if I want to go with it. As I see two potential problems with it, first of all, german companies could have a problem to deduct a LLC invoice (I heard only rumors, what do you think?) and it can be seen potentially as a "Partnership" which could make me tax liable. So the worst case would be, that in some years a company is audited, then they would find my LLC invoices, would find it fishy and start to argue with the company that they can't deduct it, then the company would say no, it's a real freelancer have a look here, ask me maybe for help and then it could spark a discussion into if the LLC is a corporation or a partnership, there are like a couple of points to check, and if I would go with a member-managed LLC, the first check would be in favor of a partnership as there is no manager. Does it make sense?

So another idea I have is setting up an UK Ltd. that can invoice in Germany and suck out the profits through a Isle of man Ltd. so that the corporation tax goes from 19% to 0 %. Is this possible? Are there better options that you know? I need to have a reputable invoicing company, that is not looking suspicious by any means, but I would like to stay 0% taxed.

Can you file all the forms by yourself, would be easy enough?

I checked the annual filing fees for a UK Ltd. are 13 pounds and for the IOM Ltd. 99 pounds.

Other idea would be also UK Ltd. -> US LLC -> me.

I'm open to your ideas and notes!
Thank you!

I've never heard of a case where a US LLC was seen as a "Partnership" by the German tax authorities. I'd say there is no chance unless you really try hard to achieve this result. Usually, limited liability means corporation.

 

[LoveMyLife]

You did not write it exactly, but I expect, you are living in Germany an trying to save a taxes of your german company.. Am I right?

Any foreign company which will be directed by you, will be a tax resident of country where you are a tax resident, it that country has a CFC rule., If you are a tax resident of Germany, all those companies will be a tax residents of Germany. Does not matter where this companies will be incorporated.

If german tax authorities will find invoiced from US LLC or from UK LTD, they will start their internal investigation - without noticing you. And when they will have an evidence, that a foreign company is directed by you, they will send a financial crime unit to arrest you. Because that foreign company as german resident have not filed a german tax report and has not paid taxes, what is a criminal offence in a Germany.

Germany is a tax rumor.. If you are living in Germany and need to optimize a taxes there, you will need much more sophisticated structure than just having some fancy shell company somehwere..

 

[drn]

You did not write it exactly, but I expect, you are living in Germany an trying to save a taxes of your german company.. Am I right?

Any foreign company which will be directed by you, will be a tax resident of country where you are a tax resident, it that country has a CFC rule., If you are a tax resident of Germany, all those companies will be a tax residents of Germany. Does not matter where this companies will be incorporated.

If german tax authorities will find invoiced from US LLC or from UK LTD, they will start their internal investigation - without noticing you. And when they will have an evidence, that a foreign company is directed by you, they will send a financial crime unit to arrest you. Because that foreign company as german resident have not filed a german tax report and has not paid taxes, what is a criminal offence in a Germany.

Germany is a tax rumor.. If you are living in Germany and need to optimize a taxes there, you will need much more sophisticated structure than just having some fancy shell company somehwere..

No, I don't live in Germany! As I have written in the other thread about the US LLC.

 

[Fred]

No, I don't live in Germany! As I have written in the other thread about the US LLC.

Even if not in Germany. Most of the EU countries have the CFC rules in place so that a shell company somewhere doesn't make much sense. Get at list a shell company in a Jurisdiction that provides you with a residence and therefore the bank accounts can be opened with the residence and no CRS reporting will happen - like in Dubai.