Looking for someone to consult me on the best way to cash out Crypto with minimal tax.

[Jessie]

Everything is legally acquired (even if some early buys are hard to prove) and I'm looking for ways to cash out crypto currency legally BUT with the minimal tax possible.

I'm EU citizen and have a company in HK.

So far, from my research seems like paying myself dividends from the HK company would be the best way.
Logic is, HK company has no tax on foreign income.
Then HK company pays dividends to it's owner (me) and I owe 5% tax on that in my country of citizenship.

However, I need a way to transfer the crypto from me to the HK company.


Anyway, if anyone can consult me on executing that or offer a better solution (better meaning lower tax, or same tax but easier) I'm open to suggestions.

To make it easier for me, please contact me telling me if my solution is what you would help me do or if you have better one and at least roughly give me idea what is it, so i can decide for myself if i'm ok.
Also include your fee, rate or how you prefer this to work in terms of your reward.

I'm looking to have this done by the end of the year, so i can file tax reports for this year in the beginning of the next one.

thank you all!

 

[Martin Everson]

1. What EU country are we talking about here?
2. Have you considered CFC rules in your home country?

You see CFC rules can make your HK company transparent for tax purposes if the place of management, control and operation is your EU country of residence (nominees will not help). You may find that cashing out via a euro personal account is more efficient.

Depending on when you acquired the crypto if you have not reported ownership of it in the past then you may already committing a tax offense. Cashing out now and then filing a tax return will not fix historic tax offenses .

Speak to an accountant that has knowledge of crypto as we cannot talk minimizing taxes if you do not provide your country of residency.

 

[Martin Everson]

What about if for example for evading the CFC rules he set up a company in a country that don't complain with that(For example a Wyoming or Delaware LLC) and make such company the Director and Shareholders of the HK company

I would just personally just pay the taxes or just move abroad and call it a day.

 

[James Turner]

What about if for example for evading the CFC rules he set up a company in a country that don't complain with that(For example a Wyoming or Delaware LLC) and make such company the Director and Shareholders of the HK company

CFC rules relate to the ultimate area of control, so if a chain of offshore companies exist with control in say the UK, then the UK CFC rules would apply to all companies in the chain.

 

[Jessie]

What about using Wirex or something like that?....they give u a debit card with an Iban

Getting the cash is not the problem, but getting it in a legal way so I can openly spend it.
Not to mention that debit card with 15k EUR annual limit is not even remotely practical to what I need to do and the amounts involved.

1. What EU country are we talking about here?
2. Have you considered CFC rules in your home country?

You see CFC rules can make your HK company transparent for tax purposes if the place of management, control and operation is your EU country of residence (nominees will not help). You may find that cashing out via a euro personal account is more efficient.

Depending on when you acquired the crypto if you have not reported ownership of it in the past then you may already committing a tax offense. Cashing out now and then filing a tax return will not fix historic tax offenses .

Speak to an accountant that has knowledge of crypto as we cannot talk minimizing taxes if you do not provide your country of residency.

1. Bulgaria
2. No, i'm not even familiar with them.

I'm physically in EU, but the business is internet based and hence global. I don't have business with local companies or individuals, neither local employees. So, the operation should not be deemed local, but again I'm not aware of any precedents of similar situations.

There wasn't government position about declaring crypto, until maybe couple years back where they suggested in an official note (law is not changed yet as far as I know) that it should be taxed as income when cashed out, which should be 10% but my memory might not be serving me well here.

Accountants here that understand crypto are hard (if not impossible) to find. Especially adequate one and thinking out of the box.

I would just personally just pay the taxes or just move abroad and call it a day.

Well, I'm going to pay the taxes, just going to minimize them first.



thank you all

 

[blizz]

Getting the cash is not the problem, but getting it in a legal way so I can openly spend it.

For that you will have to live in a country with very low to no tax! It seems obvious that it's not possible now a days to have a offshore company in country A and live in country B with high taxes!

There is still the slight option to get through with a LOAN based payment to you, but I think it's hard and expensive to setup and to convince your tax office!

 

[Jessie]

For that you will have to live in a country with very low to no tax! It seems obvious that it's not possible now a days to have a offshore company in country A and live in country B with high taxes!

There is still the slight option to get through with a LOAN based payment to you, but I think it's hard and expensive to setup and to convince your tax office!

Why is that not possible? Isn't that like the point of the whole offshore community and everything?

It shouldn't matter where I live but where business is done because that's where you pay business taxes.
Here i'm looking to pay only dividends from a company tax which is 5% and is acceptable.

 

[Martin Everson]

1. Bulgaria

I swear to God your a joker or a troll.

In Bulgaria income tax and corporate income is a flat rate of just 10%. So you are on here considering how to avoid a 10% tax....really?

Even general employment income after all social deductions is absolutely fair. Calculate for yourself below. You have to be one greedy person to want to avoid paying 10% tax rate.

Gross to Net Salary Calculator

 

[Jessie]

Well 10% is 100% more than 5%
If I can pay 2 times less, why not?

Thanks for labeling me greedy, but if you knew the absolut amounts that I would save I bet you would do the same.

 

[Martin Everson]

Well 10% is 100% more than 5%
If I can pay 2 times less, why not?

Have some respect for your host country, complaining about 10% tax rate...lol. There is people moving to Andorra to get a 10% tax rate and spending 400k+ plus to do so. Here you are in a EU country with one of the lowest fair tax rates and wanting to reduce it further.

Thanks for labeling me greedy, but if you knew the absolut amounts that I would save I bet you would do the same.

Whether you earned $1bn a year and refused to pay just 10% of that in taxes or $100k a year you are greedy human being. Something has to be mentally wrong with you. If you don't want to pay just 10% tax to run government then consider moving to a tax free country and people wonder why Bulgeria is a poor sh*thole when peoples mentality is like this

If all countries had a 10% tax rate I think there would be hardly any tax evasion or offshore business left.

 

[Jessie]

I'm not complaining about the 10%, i just like 5% better.
Also our government is supper corrupt and doesn't do s**t for the people, so I wouldn't go out of my way to support it.

Well I actually support it plenty with all the VAT I pay on everything I buy which is 20%.
And since my income is from abroad that is fresh capital pouring in the country.


Coming here contributing nothing to the thread but labeling me mentally wrong is way too much, you are well crossing a line here. If yo have nothing to contribute to my actual question but here just to give names, feel free to not come back to this thread anymore.

lol, i can't believe some people, what is mentally wrong with you to feel the need to come at people like that?
Don't bother answering me, just get lost.

 

[totlori9]

Hi Jessie,

The way I see this is there are three possible routes for you:

1. You move your residential address on paper to another juristiction. For example Malta. This case you wouldn't even need the HK company and you pay 5000€ yearly (minimum non-dom tax from 2018.jan.1. on non Maltese sourced, non capital gain income that is not remitted to Malta). - In this case you need to examine the question of how much National Health Insurance would cost for foreigners in Bulgaria as you will become one.

2. You haven't mentioned this, but your HK company should have a nominee director and nominee shareholder in order to avoid Bulgaria CFC rules (Controlled Foreign Company rules) and avoid the HK company being deemed as a bulgarian tax resident 'by management and control'. Because of this you shouldn't receive dividends from the HK company (you will get taxed on a CFC basis) and you shouldn't receive a salary deemed 'director's fees' by the double taxation treaties as a director of the company (you will get taxed on either a CFC basis or on management and control basis or BOTH). What you CAN do is receive a salary deemed 'director's fees' by the double taxation treaties - but not as a director of the company - but as a supervisory board member/protector. A salary of a supervisory board member/protector is deemed to be a 'director's fee' by double tax treaties (so is taxed at the source country not in Bulgaria) but is not moving the tax residence of the HK company to Bulgaria on a 'management and control basis', as the role of the supervisory board member/protector is not in the day to day business of the company, but they only have a 'veto' right to be able to keep shareholder interests against the director of the company. - In this case you need to examine if National Health Insurance is to be paid for bulgarian residents on foreign salaries because it can be a signifficant percentage in some countries and a lot of people forget about them and only care about the income taxes when planing.

3. You form a trust where the HK company is the settlor, you as a private person are a trustee, and the HK company is the beneficiary on paper. This way the money coming to your name is treated by Bulgarian tax authorities the same way as a loan. You are not receiving it as an ultimate beneficiary as a private person you are a vessel for european investments for the HK company. This way the money is legally coming to your name, but you are not the beneficiary of it in the eyes of the tax man.

 

[blizz]

I'm not complaining about the 10%, i just like 5% better.
Also our government is supper corrupt and doesn't do s**t for the people, so I wouldn't go out of my way to support it.

Well I actually support it plenty with all the VAT I pay on everything I buy which is 20%.
And since my income is from abroad that is fresh capital pouring in the country.


Coming here contributing nothing to the thread but labeling me mentally wrong is way too much, you are well crossing a line here. If yo have nothing to contribute to my actual question but here just to give names, feel free to not come back to this thread anymore.

lol, i can't believe some people, what is mentally wrong with you to feel the need to come at people like that?
Don't bother answering me, just get lost.

You should live where I live, 45% tax on personal income… that's f*****g s**t my friend. 10% would be perfectly fine for me. I assume more want more that's why you are looking for loopholes!

 

[negon]

lol, i can't believe some people, what is mentally wrong with you to feel the need to come at people like that?

You may consider using darks as a final step in your planning if 10% tax is too much to pay. To reduce your tax you will need to consult a good tax advisor or lawyer, he may be able to help you out and do it all legally where you live. Question is, why you didn't do that already and if you have the money to pay such an service.

 

[totlori9]

You may consider using darks as a final step in your planning if 10% tax is too much to pay. To reduce your tax you will need to consult a good tax advisor or lawyer, he may be able to help you out and do it all legally where you live. Question is, why you didn't do that already and if you have the money to pay such an service.

A bit above he wrote: 'Getting the cash is not the problem, but getting it in a legal way so I can openly spend it.'

Based on this I don't think darks would get him closer to what he wants. The way I understood it, he wants the money to be in his name.

 

[blizz]

Well 10% is 100% more than 5%
If I can pay 2 times less, why not?

Thanks for labeling me greedy, but if you knew the absolut amounts that I would save I bet you would do the same.

I agree, if you can avoid to pay tax or at least reduce it to 5% rather than 10% I would do the same. But I think it's impossible unless you consult a local tax advisor to help you. It requires someone that know the tax rules.

 

[negon]

A bit above he wrote: 'Getting the cash is not the problem, but getting it in a legal way so I can openly spend it.'

Based on this I don't think darks would get him closer to what he wants. The way I understood it, he wants the money to be in his name.

well based on his statement this is not going anyway unless you pay the tax you have to pay or use darks. I think that's a more clear answer! Otherwise you have to consult a local tax advisor to help you make this legal but I doubt it will be possible otherwise you wouldn't be here

 

[totlori9]

well based on his statement this is not going anyway unless you pay the tax you have to pay or use darks. I think that's a more clear answer! Otherwise you have to consult a local tax advisor to help you make this legal but I doubt it will be possible otherwise you wouldn't be here

A potential solution to receive funds in ones name is to claim the funds were received so that they are deemed taxable (by a doule tax treaty) in the source country and not where one is a resident. If the source country applies no or lower tax than your host country you have a win. If you check any OECD treaty these incomes usually are director's fees, fees of artistes and sportsmen, income from immovable property located in the source country and business income if it arises in connection with a permanent establishment in the source country.

 

[Jessie]

Hi Jessie,


3. You form a trust where the HK company is the settlor, you as a private person are a trustee, and the HK company is the beneficiary on paper. This way the money coming to your name is treated by Bulgarian tax authorities the same way as a loan. You are not receiving it as an ultimate beneficiary as a private person you are a vessel for european investments for the HK company. This way the money is legally coming to your name, but you are not the beneficiary of it in the eyes of the tax man.

This is interesting. Does it mean I will be effectively paying 0% tax and still be able to use the money freely?
Can you consult me and help me do this?

You may consider using darks as a final step in your planning if 10% tax is too much to pay. To reduce your tax you will need to consult a good tax advisor or lawyer, he may be able to help you out and do it all legally where you live. Question is, why you didn't do that already and if you have the money to pay such an service.

What is darks?
If it is what I think it is, i'm not looking for ways just to get the cash. I need to have it in a legal way so I can buy stuff and be able to explain from where I got the money.

I see you imply I might not be willing to consult someone local because of suspicious origin of my income. But this is not the case. I've looked for local agencies to consult me but they are not familiar enough with crypto, especially when international law and offshore companies are involved so they were of no help.
I was hoping that this place will be quite a bit more relevant since it's internet forum with crypto sub-forum.

And as mentioned, I much more prefer to just pay to someone to do it for me instead of doing all this research myself, since this is not my field at all.

 

[totlori9]

This is interesting. Does it mean I will be effectively paying 0% tax and still be able to use the money freely?
Can you consult me and help me do this?

Hi Jessie,

My understanding of forum rules is that in order for you to be able to send and recieve private messages with me (or anyone else here) you need to sign up for Mentor Group access in the top menu for 95€/month. I am not sure if being a Premium Member would be sufficient for this (it's cheaper 135€/year). Would somebody with more knowledge about forum rules be as kind and answer this?