Using Offshore Debit Card for Daily Needs Grociers Etc. Tax issues?

[nowheretobe]

Hello everyone,

I'm a long time lurker and this forum helped me a lot. I have a question which I couldn't find answer so I wanted to join and ask.

I have a Georgian LLC company with IT Certificate (%5 Tax being paid in GE). I'm living in Germany but not a citizen here. However I've been living in Germany for more than 6 months. (So I guess i need to pay taxes?)

What is the best way to bring the money I earned from my Georgian company to Germany?

Using ATM's would be a good idea? I think not.

What about using the Personal Debit Card (I have personal accounts in TBC bank) for buying daily needs? For example grocories, furniture, restaurant bills etc. Would that create problems with tax auths here in Germany? It's okay for me to keep the big amount of money in Georgia, sometimes I go there and invest in things.

There are double taxation agreement between Georgia and Germany but I'm not familliar with the details and I don't want to mix things up since I'm not a German citizen and I might not live here for more than 3-4 years. But if it's not too much and necessary, I can pay taxes too.


Thanks!

 

[Sols]

There have been a couple of big busts of offshore cards being used by tax dodgers. One of the most famous was in Sweden about 10 years ago (or longer?). Records were pulled from thousands of ATMs and POS terminals.

Each transaction contains card number and card holder's name. From the card number's BIN/IIN, you can easily determine where it's issued.

They looked at cards issued in tax havens, looked at the names of the card holders, and compared that to tax payers in Sweden. Then they simply started chasing people who used offshore cards for amounts that were not commensurate with their declared income.

For a few years after, no-name prepaid cards were popular. However, under modern AML laws, these are practically useless now. If they exist at all the amounts are limited to just a few hundred EUR per load.

Don't waste your time trying to stiff the German tax authority with such a simple setup. Pay your taxes. If you don't like German taxes, move somewhere else.

If you have significant income coming from abroad, sit down with a German tax adviser and see what you can do to legally reduce your tax burden. I feel people often come here thinking taxes are black or white. Either you pay nothing or you pay >50%. There are almost always deductions and incentives available if you just know where to look and structure your affairs properly.

 

[ih8socialism]

It depends,

are you registrated in germany? Where exactly do you live and are you living in apartment rented on your name? Are you having sim cards in your name?

 

[nowheretobe]

There have been a couple of big busts of offshore cards being used by tax dodgers. One of the most famous was in Sweden about 10 years ago (or longer?). Records were pulled from thousands of ATMs and POS terminals.

Each transaction contains card number and card holder's name. From the card number's BIN/IIN, you can easily determine where it's issued.

They looked at cards issued in tax havens, looked at the names of the card holders, and compared that to tax payers in Sweden. Then they simply started chasing people who used offshore cards for amounts that were not commensurate with their declared income.

For a few years after, no-name prepaid cards were popular. However, under modern AML laws, these are practically useless now. If they exist at all the amounts are limited to just a few hundred EUR per load.

Don't waste your time trying to stiff the German tax authority with such a simple setup. Pay your taxes. If you don't like German taxes, move somewhere else.

If you have significant income coming from abroad, sit down with a German tax adviser and see what you can do to legally reduce your tax burden. I feel people often come here thinking taxes are black or white. Either you pay nothing or you pay >50%. There are almost always deductions and incentives available if you just know where to look and structure your affairs properly.

Hey Sols,

Thank you for your message, this makes great sense to me. I'm not trying to avoid paying taxes but since I don't speak German and like everything else in Germany, Tax system is pretty complicated. I'll talk with some tax advisors and try to clarify the situation!

It depends,

are you registrated in germany? Where exactly do you live and are you living in apartment rented on your name? Are you having sim cards in your name?

Yes, I am registered here, I have an address, a job etc.. So I guess it'd be 1 min task for any kind of authority to find me

 

[micand]

Hey Sols,

Thank you for your message, this makes great sense to me. I'm not trying to avoid paying taxes but since I don't speak German and like everything else in Germany, Tax system is pretty complicated. I'll talk with some tax advisors and try to clarify the situation!



Yes, I am registered here, I have an address, a job etc.. So I guess it'd be 1 min task for any kind of authority to find me

Do you employ a local director for your company in Georgia or are you the director, residing in Germany?

 

[nowheretobe]

Do you employ a local director for your company in Georgia or are you the director, residing in Germany?

I'm the director, I have no nominee etc.

 

[micand]

I'm the director, I have no nominee etc.

I suppose you are using this structure to save taxes, right?

 

[ih8socialism]

Hey Sols,

Thank you for your message, this makes great sense to me. I'm not trying to avoid paying taxes but since I don't speak German and like everything else in Germany, Tax system is pretty complicated. I'll talk with some tax advisors and try to clarify the situation!



Yes, I am registered here, I have an address, a job etc.. So I guess it'd be 1 min task for any kind of authority to find me

Then this is pretty risky. Esepcially if you are the only one who the company employs. Germany can even consider your company like a "Solo Entrepreneurship" Company make it fully taxable in GER. If you want to escape geramn dracula you have to leave it.

 

[nowheretobe]

I suppose you are using this structure to save taxes, right?

Yes I used but I wasn't living in Germany back then and I don't want to do wrong by Germany.

Then this is pretty risky. Esepcially if you are the only one who the company employs. Germany can even consider your company like a "Solo Entrepreneurship" Company make it fully taxable in GER. If you want to escape geramn dracula you have to leave it.

What would happen if I don't bring any money to Germany? What happens if I just leave money in my Georgian personal bank accounts and spend the money in Georgia or on my trips to other countries?

Would that cause any issues?

 

[ih8socialism]

Yes I used but I wasn't living in Germany back then and I don't want to do wrong by Germany.



What would happen if I don't bring any money to Germany? What happens if I just leave money in my Georgian personal bank accounts and spend the money in Georgia or on my trips to other countries?

Would that cause any issues?

Yes,

if you are living 183+ days in Dracula Germany, they will tax your income where ever you made it as long as they know about it, and if they don't and you don't declare it you make yourself guilty of tax evasion.

The easiest and cleanest solution is to just leave this shitty country behind you.

 

[nowheretobe]

Thanks for the information.

I guess that's a gamble then. My accounts in Georgia and they might share the information on me in the next years.

If I wasn't in Germany I'd probably get corona in my home country and dying at the moment. If there are no third options, i'm okay to pay some taxes

 

[ih8socialism]

Thanks for the information.

I guess that's a gamble then. My accounts in Georgia and they might share the information on me in the next years.

If I wasn't in Germany I'd probably get corona in my home country and dying at the moment. If there are no third options, i'm okay to pay some taxes

If you need stay in germany then there are not any good options to get rid of income tax.

If you don't need monthly payouts leave as much as you can in your gercompany, try to cover as much expenses as possible with your german company and only pay yourself a small salary so it doesn't get taxed high. Instead of a high salary pay yourself some dividends which are only getting taxed with 25% for now, but discussions are going in germany to raise taxation on dividends already lol

May I ask in which part of germany you are located?

 

[nowheretobe]

try to cover as much expenses as possible with your german company and only pay yourself a small salary so it doesn't get taxed high.

I don't have a German company. Should I get a Germany company? I didn't get this part to be honest

I'm doing everything on my Georgia company and I also pay dividens in Georgia. Isn't there a double taxation agreement between Georgia and Germany so I don't pay it twice? From my Georgian company I don't pay myself any salary etc, I just take the profit as the owner and 100% share holder of the company.

I don't even know which tax I should pay in Germany

I'm around lower saxony region. Does it change anything regarding tax schemes? I know there are some different taxations but general things are same around the country I guess.

 

[ih8socialism]

I highly advise you to visit a german tax consultant other wise you might get massive problems if you plan on staying officially in germany.

The money you take out of the company is afaik considered as personal income, so if you stay in germany 183+ days it is taxable in germany.

I have no clue how germany would treat a solo entrepreneur company from georgia tbh. If your company is alread located in georgia ain't moving to a zero tax country an option for you?

Best Regards

 

[Spinat]

I highly advise you to visit a german tax consultant other wise you might get massive problems if you plan on staying officially in germany.

yeah it may be the best to do. If you want to stay in Germany for longer time you have to pay taxes or at least consult a tax advisor there that can help you. Sometimes you don't even need to pay taxes from money you bring into the country and earned before you came there!

 

[nowheretobe]

I highly advise you to visit a german tax consultant other wise you might get massive problems if you plan on staying officially in germany.

The money you take out of the company is afaik considered as personal income, so if you stay in germany 183+ days it is taxable in germany.

I have no clue how germany would treat a solo entrepreneur company from georgia tbh. If your company is alread located in georgia ain't moving to a zero tax country an option for you?

Best Regards

yeah it may be the best to do. If you want to stay in Germany for longer time you have to pay taxes or at least consult a tax advisor there that can help you. Sometimes you don't even need to pay taxes from money you bring into the country and earned before you came there!

Thanks for the help. I'll talk with a tax advisor, I'll try to update here later. Maybe it will help some people! Moving to another country is not an option at the moment and I like it here!