Want to minimise my tax liabilities

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gap

New member
I got a remote job in the US, as a Hungarian citizen what are my tax minimisation options? Probably the best option would be to change residence, but is it worth the effort and initial costs for about 72,000 USD per year from that US company + ~48,000 USD / year from another individual (payed in crypto)?
- What are my options for opening a business + bank account?
- Transfering funds to personal bank account to pay the bills etc?

- Right now I'm in 'KATA (“Small Taxpayers’ Tax”)' form of taxation, It is a fixed amount of tax in every month (~130 USD/m) that is independent of the actual income
- If I receive more than 3M HUF (~7,900 USD) in income from a foreign partner in a given year, I will have to pay 40% tax on 71.42% of the income.

Current LLC taxation in Hungary
- Corporate tax = 9% / yr
- Local business tax = 0 - 2% / yr (0.5% in my city)
- Chamber of Commerce registration fee = ~13 USD / yr
- Dividend tax = 15%

I want to set up an LLC in a country where I might be more tax efficient :) Please tell me some of your experience, it's not a lot of money, but that's why it matters to me to choose the best possible solution.
 

Larin

New member
Finally someone asking a sensible question, rather than, how do I pay 0%, which everyone else seems to want to know.
If you remain in Hungary, you and your company, regardless of where you register it, will be Hungarian tax residents. Therefore, it does not matter where your company is registered. In your situation, you will want to hire a good Hungarian accountant who will use his or her knowledge of the Hungarian tax code to advise you. Some of the more common strategies to reduce corporate tax burden is to run various expenses through the company, reinvest profits, etc.
Moving countries is a major life decision, but should you wish to do that, there are probably a few countries that would have lower tax rates, Cyprus, Bulgaria, Portugal come to mind.
 

lostguy

BANNED MEMBER
If you are doing such money it may be worth it for you. Depending on what it is you leave and what it is you will meet.
 

Martin Everson

Offshore Retiree
Staff member
Mentor Group Gold
Elite Member
I got a remote job in the US, as a Hungarian citizen what are my tax minimisation options? Probably the best option would be to change residence, but is it worth the effort and initial costs for about 72,000 USD per year from that US company + ~48,000 USD / year from another individual (payed in crypto)?

Ok so is this a partnership your entering? I am trying to understand how the tax could be so high in Hungary in this situation eek¤%&.

In any case @Larin gave good advice.
 

pesto

Offshore Agent
Mentor Group Gold
I don't understand it, Hungary has a acceptable tax rate, why would you relocate?
 

Martin Everson

Offshore Retiree
Staff member
Mentor Group Gold
Elite Member
It does indeed have a fair tax rate so I am trying to understand how that high rate he mentioned came about and if it is a special situation related to partnerships or something.
 

Marzio

Rainmaker
Entrepreneur
The best option is Hungarian LLC that pays 9% CIT and 15% PIT. Other than that don’t you have to pay social security?
 

fortunespeculator

BANNED MEMBER
Finally someone asking a sensible question, rather than, how do I pay 0%, which everyone else seems to want to know.
If you remain in Hungary, you and your company, regardless of where you register it, will be Hungarian tax residents. Therefore, it does not matter where your company is registered. In your situation, you will want to hire a good Hungarian accountant who will use his or her knowledge of the Hungarian tax code to advise you. Some of the more common strategies to reduce corporate tax burden is to run various expenses through the company, reinvest profits, etc.
Moving countries is a major life decision, but should you wish to do that, there are probably a few countries that would have lower tax rates, Cyprus, Bulgaria, Portugal come to mind.
or if you are open then via somebody's seychelles ibc -pay him a few percent(4-5%) and get your money in a non crs bank account.
 

CyprusLawyer101

Mentor Group Gold
Moving countries to avoid taxes is indeed rather radical decision and the total tax relief you get should be the basis upon which to weifh auch a decision. Howerver , if tou move to Cyprus and can demonstrate a foreign employer and provided you fly out of Cyprus for at least 90 days to perform your employment duties then your income would be fully exempted from tax.
 

JimBeam

Entrepreneur
My advice would be to open up a company and find a VERY GOOD accountant that knows how to place as much personal spending as possible on the company's account (things like phone bill, petrol, car usage or car lease, restaurant bills). Somewhere is even possible to rent a flat for an office and actually live in it just have one room setup as a company office. Pay out your self minimal salary (€500/month + contributions of probably another €600) and you can take the rest as dividends (at 15%). You'll sleep well and live nicely with this kind of money in Hungary.

Both CIT and dividend taxes in Hungary are among the lowest in Europe so you won't find it much cheaper than that.
 

lostguy

BANNED MEMBER
My advice would be to open up a company and find a VERY GOOD accountant that knows how to place as much personal spending as possible on the company's account
That's actually a very good suggestion, it's the way to legally reduce taxes.
 

gap

New member
Thank you all for your answers. It helped me accept that I'm not in such a bad position as a tax resident in Hungary.
I have been looking for the right accountant for many weeks. It's harder than I thought.
 
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