Best way to set up company to charge customers Tax Free?

[daniels27]

That's exactly what people need to consider in such corporate constructions, most don't even know about transfer pricing! Things are getting more complicated for every year from now.

There are enough companies like Paddle, Digital River. You can check their fees. 3% on top of processor fees is no issue.

Also, the armlength principle is not a problem in this case as there are no employees and no substance involved. You can just get a tax ruling and it will be even lower than 1%.

You should read @JustAnotherNomad above.

 

[Don]

There are enough companies like Paddle, Digital River. You can check their fees. 3% on top of processor fees is no issue.

Also, the armlength principle is not a problem in this case as there are no employees and no substance involved. You can just get a tax ruling and it will be even lower than 1%.

You should read @JustAnotherNomad above.

Indeed "payment processor" companies entitled to 1% profits are quite standard.

 

[JustAnotherNomad]

Dutch law exacfty states that passed through incone of this type of entity is considered to be a income of the PE of the partners and that all partners receiving income through this entity are considered as having PE in Netherlands. Read dutch law before writing an answer.

To be fair, I don't know anything about Dutch CV's specifically.
I know someone who has used them in the past - they were registering it with an address outside NL and according to them, that was enough for the Dutch tax authority to basically ignore the whole thing. But from what I have understood, it was very difficult to get banking for that.

In any case, partnerships in general are usually tax transparent and only pay local tax on local income (=income associated with a local PE). So income of a partnership does not automatically become subject to tax, they are transparent. That's why US LLCs etc. are so popular.
And they definitely don't change the tax residency status of the partners (or do you become a US tax resident when you buy Tesla shares?).

 

[EliasIT]

We run UK Ltd's as payment processors for several businesses and never faced any troubles like what is mentioned here, some of them run for more than 7 years buy now without anyone questioning the setup!

 

[JustAnotherNomad]

Are they wholly owned by the company they do the processing for? Or do you use one company that does all the payment processing for your different companies?

 

[uplana]

We run UK Ltd's as payment processors for several businesses and never faced any troubles like what is mentioned here, some of them run for more than 7 years buy now without anyone questioning the setup!

same thing here, read about it in the guide admin posted in mento group years back.

The companies are wholly owned by the company they process cards for. You can't mix it if you want to avoid troubles with the tax office.

 

[EliasIT]

Are they wholly owned by the company they do the processing for?

yes