Buying a car in Europe with a offshore bank account

[avalanche]

Well he is a Tesla cult member so what do you expect. They are all like this i.e zero basic common sense or logic and totally irrational due to a blind following of Tesla . They come second only to blind followers of EPB and Peter Schiff.

Never tried Tesla but I like the idea of it. I'm not a fan but would like to check it out one day.

Although I can say straight that I dont want to own any cars in the nearest future lol. Its like a burden.
Just book damn Uber and go wherever you like.

This urge to show off in such cheap ways is demonstrating how superficial and empty the person is.

 

[Martin Everson]

Just book damn Uber and go wherever you like.

Exactly.

 

[Jea]

What you actually need to do is setup a company in Portugal, get 100k in the company, buy the used car with companies money 80k, spend some money on accounting, smallest salary 1k/month. At the end of the year you will have:

How would he get his undeclared 100k into the Portuguese company?

 

[Reboot]

How would he get his undeclared 100k into the Portuguese company?

as initial capital

 

[Jea]

as initial capital

How would he transfer it?
1. Bank wire from an offshore country?
2. Cash?
Both could cause problem...

 

[Reboot]

How would he transfer it?
1. Bank wire from an offshore country?
2. Cash?
Both could cause problem...

depending on who are the shareholders

 

[Malta]

for the cars I use a precise scheme, I open a normal LTD in Bulgaria, with which I declare my will to rent the owned cars.
If the funds with which you open and funds the company come from your private account it is not a problem, if they come from another person or from another company, just make a non-interest bearing loan contract.
If you do not want to make strange statements, just need to pay the 10% offshore flet tax on the contributions received.
Then I rent them to the natural person or to the company, I pay a minimum of taxes on the contract (like € 1000 per year) I pay 10% of taxes in Bulgaria (€ 100), and on condition that I do not have offices of the Bulgarian company that rents in other states in europe, there are no problems (the law says that if the rental company is also based in another state, such as Hertz, Avis etc., when you are in the other member state you have an obligation to nationalize the car and therefore change the license plate, this obviously does not happen if the Bulgarian company does not have other offices in Europe), from 2009 to today, they have stopped me many times, both to me and to my customers, but I have never received any fine or report .
The main rule of who has the money says that if you can afford it, pay taxes, but if you consider that when you buy the car you do not pay VAT because it is a vehicle that you then rent again, the vehicle management fees are very low, you immediately realize that if for example you take a 100K car in a state like Italy or Malta, within 3 \ 4 years you would have bought back another one with the costs and taxes you have to pay, also if you consider that in the rental fee you can insert, fuel, maintenance and pimps, you can decide to divert the management funds (taxes, stamp duty and insurance) for example on vehicle maintenance, fuel, tires.
Example I pay a 300k Lamborghini 20% less (besides the discount because you are a car rental) so let's say that I pay 230k between discount and VAT.
Give tax and stamp insurance in BG I pay about 1500 € per year with the kasco.
If I had to do the same thing in Italy, I would pay at least 17k a year, in Malta it will impossible in my opinion for the plate cost (like the same cost of the veicle).
So between tax savings, management savings and the fact that you can charge rental invoices like a cost, you can easily reach profit in this management.
How much is lamborghini worth after 4 years?
Let's say 150k, plus the savings accumulated in 4 years (another 60k) in fact you would find yourself in a condition to resell the vehicle and earn it or if you decide to keep it you will go on using it, and when you get to the 6th year, you will probably have that car all repaid with the savings you had in management.
Here is my experience

It is true that going around with a nice car with a Bulgarian license plate, not always decent, but between the savings on stamp duty and insurance, the absolute lack of tax burden on the person and obviously the ease with which you can regularly redo the contracts, the many fines that do not make because it becomes difficult to notify, for me my machines will always remain Bulgarian, it pays a lot.
(I do the comparison between Italy, Malta, Bulgaria, Lithuania, Estonia, Germany, I have never made comparisons with other states)

 

[Jea]

Give tax and stamp insurance in BG I pay about 1500 € per year with the kasco.

This is insurance for damage caused to a 3rd party, right?

How much is accident insurance for a 300k rental lambo?

 

[Malta]

1500€ is the yearly cost fot a top car, like a Lambo or Ferrari, The cost take care of the RC,TAX, KASCO and vignetta

 

[clemens]

1500€ is the yearly cost fot a top car, like a Lambo or Ferrari, The cost take care of the RC,TAX, KASCO and vignetta

BS - where do you get a Lambo for 1500 a year! Are you mentally disabled ?

 

[Malta]

BS - where do you get a Lambo for 1500 a year! Are you mentally disabled ?
View attachment 1429

if instead of offending you read what is written, perhaps you would better use your time and resources

 

[clemens]

if instead of offending you read what is written, perhaps you would better use your time and resources

True maybe I'm the one that is disabled

 

[Jea]

1500€ is the yearly cost fot a top car, like a Lambo or Ferrari, The cost take care of the RC,TAX, KASCO and vignetta

What's RC? And what's covered under the Casco insurance?

 

[ih8socialism]

for the cars I use a precise scheme, I open a normal LTD in Bulgaria, with which I declare my will to rent the owned cars.
If the funds with which you open and funds the company come from your private account it is not a problem, if they come from another person or from another company, just make a non-interest bearing loan contract.
If you do not want to make strange statements, just need to pay the 10% offshore flet tax on the contributions received.
Then I rent them to the natural person or to the company, I pay a minimum of taxes on the contract (like € 1000 per year) I pay 10% of taxes in Bulgaria (€ 100), and on condition that I do not have offices of the Bulgarian company that rents in other states in europe, there are no problems (the law says that if the rental company is also based in another state, such as Hertz, Avis etc., when you are in the other member state you have an obligation to nationalize the car and therefore change the license plate, this obviously does not happen if the Bulgarian company does not have other offices in Europe), from 2009 to today, they have stopped me many times, both to me and to my customers, but I have never received any fine or report .
The main rule of who has the money says that if you can afford it, pay taxes, but if you consider that when you buy the car you do not pay VAT because it is a vehicle that you then rent again, the vehicle management fees are very low, you immediately realize that if for example you take a 100K car in a state like Italy or Malta, within 3 \ 4 years you would have bought back another one with the costs and taxes you have to pay, also if you consider that in the rental fee you can insert, fuel, maintenance and pimps, you can decide to divert the management funds (taxes, stamp duty and insurance) for example on vehicle maintenance, fuel, tires.
Example I pay a 300k Lamborghini 20% less (besides the discount because you are a car rental) so let's say that I pay 230k between discount and VAT.
Give tax and stamp insurance in BG I pay about 1500 € per year with the kasco.
If I had to do the same thing in Italy, I would pay at least 17k a year, in Malta it will impossible in my opinion for the plate cost (like the same cost of the veicle).
So between tax savings, management savings and the fact that you can charge rental invoices like a cost, you can easily reach profit in this management.
How much is lamborghini worth after 4 years?
Let's say 150k, plus the savings accumulated in 4 years (another 60k) in fact you would find yourself in a condition to resell the vehicle and earn it or if you decide to keep it you will go on using it, and when you get to the 6th year, you will probably have that car all repaid with the savings you had in management.
Here is my experience

It is true that going around with a nice car with a Bulgarian license plate, not always decent, but between the savings on stamp duty and insurance, the absolute lack of tax burden on the person and obviously the ease with which you can regularly redo the contracts, the many fines that do not make because it becomes difficult to notify, for me my machines will always remain Bulgarian, it pays a lot.
(I do the comparison between Italy, Malta, Bulgaria, Lithuania, Estonia, Germany, I have never made comparisons with other states)

Thats an interesting concept, I am living in GCC but still spend 3-5month each year in Germany so instead of always renting cars I thought about buying one and leaving it for my fam when I am away but using a german company for renting it out always seemed very expensive. Bulgaria seems like a very good alternative. Thank you for that useful content.

 

[JustAnotherNomad]

I’m not sure I follow. So you buy a Lamborghini for 230k excluding VAT.
And you resell it for 150k after 4 years. Do you mean 150k including or excluding VAT?
A drop from 230k to 150k seems very little, but I don’t know anything about that kind of cars. So you still lose 80k at least, 20k per year.
But you can get a tax deduction because you set a high monthly rent? Which is a business expense for your other company that rents the car? And the rental car company makes a small profit, so there are hardly any taxes?
What exactly is the benefit then? Surely the other company could just buy or lease the car directly?
I still don’t see how that car pays for itself.
It’s a bit confusing...

 

[Malta]

“I'm not sure I'm following. So you buy a Lamborghini for 230k excluding VAT.
And you sell it for 150,000 after 4 years. You mean 150,000 VAT included or excluded? "

Obviously VAT included, when you are a renter company you buy without VAT but obviously when you resell it is with VAT.

“A drop from 230k to 150k seems very small, but I don't know anything about that type of car. So you still lose at least 80k, 20k a year. "

I don't make the market rules, today a Lamborghini that 3 years ago cost 300k (except special models) is worth like 150k.

"But can you get a tax deduction because you've set a high monthly rent?"

We are not talking about high tax deduction, but about simplified management costs.
Being able to afford a Lamborghini does not necessarily mean paying it back in full every 4 \ 5 years (due to the different insurance costs and taxes in some states).

If in Italy for example you spend 17k a year for stamp duty and insurance and tax (nothing else) and then is an allert for your private income, if we want to take into consideration maintenance costs or changes, fuel etc ... if you open a rental company in Bulgaria, which rents you that specific vehicle, for example at 10 € per day, you will pay 300 € per month of rental fee per month, 1600 € per year, so it becomes easy to understand what you save, maybe becouse you can collect this 1600€ like a cost.
If then we consider that the operating profit on the company in Bulgaria pays 10% of taxes, the scenario becomes simple to understand.

"What is a corporate expense for the other company that rents the car?"

It depends on what you want to do, if you want to manage your private garage, the price is up to you according to your needs, if you really want to offer a service to the public, you have to deal with your new competitors.

"And the car rental company has a small profit, so there are almost no taxes?"

The company always has profits on the proceeds, then it is up to the accountant, with the depreciation, to manage the profits on the investments.
In any case, you pay 10% as a company on the profit, and if you take dividends you need to pay an additional 5%.

"What exactly is the advantage then?"

You are able to contain the costs of purchase, maintenance, management, pay 10% corporate taxes on profits, purchase without VAT, if then you have a company where that machine is amortizable or deductible, then you save on the whole line.


"Surely the other company could simply buy or rent the car directly?"

Obviously if you are a rental company, you buy, sell and rent vehicles, it is up to you what you want to do.

"I still don't see how that car pays for itself."

Example
Vision Italy:
Buy: 300k
Assurance, tax, etc: 17k year
Ordinary maintenance: 10K year
Extraordinary maintenance: 10k year
Gasoline x 10000km: 3.5k year
Summer tires: 3.5k year
Winter tires: 5k year

Total annual fixed costs on a Italy basis: 49k per year

Vision Bulgaria:
Buy: 240k
Assurance, tax, etc: 1.7k year
Ordinary maintenance: 5K year
Extraordinary maintenance: 5k year
Gasoline x 10000km: 3.5k year
Summer tires: 3.5k year
Winter tires: 5k year

Total annual fixed costs on a Bulgaria basis: 23.7k per year

Now already only in terms of maintenance costs, you save about 25k per year, (and I calculated only 10000 km per year) compared to a vehicle management not in Bulgaria, then you must consider that when your foreign company rents you the vehicle from Bulgaria, the rental in some cases can be considered a cost (at 30% or even up to 100%, depending on what type of company you are), and the costs of fuel, tires, changes, falling under the rental contract, can give you additional parameters of analysis.

"It's a little confusing ..."

I hope it is clearer to you now

 

[KJK]

Very interesting insight from @Malta, thanks a lot!

I recently noticed site of a very interesting guy, Michael Bazzell:
https://inteltechniques.com/book7.htmlHe focuses on exactly these topics - buy a house anonymously, e.g. via a trust; buy a car anonymously, use services in such way.

He wrote several books and had a lot of resources on his site; the bad thing is that the books aren't available as e-book/Amazon because he doesn't like that and the tools and resources are now member-only access because he was threatened by his host to take them down. Anyways, if you dig deeper into the site and into his podcasts, he explains some ways how it can be done. It is US focused but large part of his advice can be used in the rest of the world as well.

 

[JustAnotherNomad]

Thanks for the clarification. It is well known that Italy has extortionate taxes on “luxury vehicles”. So of course many Italians register their cars abroad to save money.

But VAT? You say you buy without VAT, but sell with VAT.
VAT in Bulgaria is 20%, so if you buy for 230k (net) and sell for 150k (gross), you’re really selling for 125k. So you pay 105k over 4 years, or about 26k per year in depreciation.
I guess that’s pretty normal or even on the low side as I think most cars lose about 50% of their value over the course of 3 years - and here it’s under 50% over 4 years.
Anyway, that loss of value would be an expense in any other country as well.
Or are you comparing owning the car through a company with owning it as a private individual? Of course, as I private individual, you have to pay the VAT. And when you sell it, you can’t declare the VAT, so you get to pocket the full amount, but it might be more difficult to find a buyer. So as a private individual, you would be looking at 300k vs 150k - a 150k difference. So I agree that it would of course make more sense to buy as a company.

Why is maintenance so much cheaper if the car is owned by a Bulgarian company? Do Italian garages charge 100% extra taxes on repairs if it’s an Italian car?

I’m just not sure if this all makes sense if you don’t live in a country like Italy that has these excessive taxes.
If you lived in Sweden for example (just to give an example from a high tax country) and just bought the car through your company, there also would be no VAT to pay.
Also I think you’re lucky if Italy never out an end to your scheme. For example, residents of Norway (Norway has a tax of about 100% on almost all kinds of cars) are not allowed to drive foreign-registered cars at all. You can’t even rent a car from Sweden. If they catch you, they just take the car away and demand the taxes, even if it’s not your own car. The only exception would be if you move house or something like that, but even then you have to declare to the customs when you entered the country with your Swedish rental car and when you left again. And this can only be for a few days and specific purpose.

Anyway, I think what really would be interesting is buying the car through an Isle of Man company. I have heard that all the billionaires buy their private jets and yachts through leasing companies there, so basically the same setup that you have with Bulgaria. The reason is that they don’t pay VAT when they buy the car as usual, but when they sell it (with VAT), they can just keep the full amount and don’t have to pay the VAT to the tax office. But I’m not sure if that’s still possible, I read that the EU is trying to close the loophole.

 

[Jea]

..

How much do you pay for accident insurance (covering cases where you cause the accident) for the lambo? I assume you have it since you rent the car.

 

[Frank N Stein]

for the cars I use a precise scheme, I open a normal LTD in Bulgaria, with which I declare my will to rent the owned cars.
Then I rent them to the natural person or to the company, I pay a minimum of taxes on the contract (like € 1000 per year) I pay 10% of taxes in Bulgaria (€ 100), and on condition that I do not have offices of the Bulgarian company that rents in other states in europe, there are no problems, from 2009 to today, they have stopped me many times, both to me and to my customers, but I have never received any fine or report .
The main rule of who has the money says that if you can afford it, pay taxes, but if you consider that when you buy the car you do not pay VAT because it is a vehicle that you then rent again, the vehicle management fees are very low, you immediately realize that if for example you take a 100K car in a state like Italy or Malta, within 3 \ 4 years you would have bought back another one with the costs and taxes you have to pay, also if you consider that in the rental fee you can insert, fuel, maintenance and pimps, you can decide to divert the management funds (taxes, stamp duty and insurance) for example on vehicle maintenance, fuel, tires.

Will this scheme work in Portugal? Since the company is in Bulgaria, the insurance is paid in Bulgaria only, no need to re-insure it if the vehicle is used in Portugal?