Software Team

[CryptoMoney]

Hello,

im a developer with a 4 man team and we sell our software solutions woldwide. The software we sell is not illegal but also not 100% legal. Its a gray zone but until now nobody who does it got problems of it.

We wanted to see if we can pay our taxes somewhere else instead of Germany. We have thinked about ireland or cyprus since the taxes are only 12.5% there.

How would such a company work since we only accept crypto currencies as payments. How would we pay taxes there and how would we be out of paying taxes in germany.

Regards,
CryptoMoney

 

[Martin Everson]

To be honest you would need to check directly with the concerned tax authority. Taxation of trading and investment is clear in some countries but taxation when used as a means of payment I don't think so.

There is tax and there is VAT (if customer is in EU) you need to pay both. Both need to be done in fiat. One solution would be to keep records on the fiat value of crypto on the day the sale was made by your company and pay VAT by converting the VAT charged in crypto to fiat. You would then do the same for tax on profits due at end of year. However I see problems with this approach if you don't convert the tax amount due after each sale i.e if you wait until end of year and crypto price crashes when you want to convert to fiat you will go bankrupt...lol.

 

[CryptoMoney]

To be honest you would need to check directly with the concerned tax authority. Taxation of trading and investment is clear in some countries but taxation when used as a means of payment I don't think so.

There is tax and there is VAT (if customer is in EU) you need to pay both. Both need to be done in fiat. One solution would be to keep records on the fiat value of crypto on the day the sale was made by your company and pay VAT by converting the VAT charged in crypto to fiat. You would then do the same for tax on profits due at end of year. However I see problems with this approach if you don't convert the tax amount due after each sale i.e if you wait until end of year and crypto price crashes when you want to convert to fiat you will go bankrupt...lol.

We sell our software only outside of EU (China for example), so i guess VAT wont need to be paid then?
Would you either prefer a cyprus company or a ireland company? I see that many crypto exchanger have their office and company registered in cyprus.

 

[Martin Everson]

Firstly read up German tax code if that is where you are based. Then you will have your answer of how to do it properly.

Just picking another EU country with low tax and unilaterally deciding that is where you will pay your taxes is wrong. You can also search for other threads in the forum where the issue of where tax would have to be paid has been discussed at length.