Permanent Establishment enforcement

[yngmind]

Have you ever seen PE rules enforced?

You are an EU resident with a company in Seychelles, and the EU asked you for the CT because you "manage it from the EU"?

It seems like it only works for the multinational companies.

 

[ActionMan]

Have you ever seen PE rules enforced?

No, not enforced in the UAE, nor Mexico.

You are an EU resident with a company in Seychelles, and the EU asked you for the CT because you "manage it from the EU"?

It seems like it only works for the multinational companies.

it can and is definitely working in the EU, but it differ from country to country, Spain for example will go after you, your father, your mother and everyone in your family if they suspect you of doing something that's not deemed decent in their tax bible. but Greece, Cyprus or Malta? not so much.

So plan a head, and have a plan B. but as a general rule of thumb, better be safe than sorry. having substance abroad OR moving abroad. no in-betweens.

 

[Sols]

Have you ever seen PE rules enforced?

PE and similar (tax residence), yes.

You are an EU resident with a company in Seychelles, and the EU asked you for the CT because you "manage it from the EU"?

It plays out differently in different jurisdictions and even within the same jurisdiction based on quality and quantity of the evidence they have against you.

In many cases, the tax authority will give a warning that you are being looked into. This is an invitation to act quickly to be proactive. Admit fault, accept the repercussions, and have a lawyer make sure you don't get completely hosed. But this is better than waiting for them to finish their investigation. You know how AI chatbots hallucinate and confidently present incorrect informations? Tax authorities also hallucinate a lot. They are content with a rough estimate that's rounded up following some templates/models they work with. Then it's up to you to fight them. But the invoice is due within 30 days anyway.

It seems tax authorities have figured out that if they crack down hard on one or a few people, it has a ripple effect. People in the same circles rush to get their affairs in order to not be the next one on the chopping block.

It seems like it only works for the multinational companies.

That's because you don't hear about the smaller cases. Most tax law enforcement actions don't become public knowledge. If you start trawling through court records, you might be able to find cases.

 

[yngmind]

I have a friend who is a tax resident of two EU countries. He has his company in Bulgaria and is a citizen of Greece.

He resides in Greece and has his company + office in Bulgaria, virtual apartment rent. He has a tax ID in both countries, and he told me that he pays taxes in Bulgaria (10% corp tax + 5% dividend tax), residing in Greece, and it's 100% legal.

 

[jafo]

Tax authorities also hallucinate a lot.

#Bingooooooooooo

 

[clemens]

That's because you don't hear about the smaller cases. Most tax law enforcement actions don't become public knowledge. If you start trawling through court records, you might be able to find cases.

Yeah, who would publish if he has been through this ?? no one!

 

[Sols]

A lot of people confuse not having been caught with something being legal.

Have a lawyer draft a legal opinion and/or notify the tax authority. That's how you find out of it's (probably) legal.

 

[mud]

I have a friend who is a tax resident of two EU countries. He has his company in Bulgaria and is a citizen of Greece.

He resides in Greece and has his company + office in Bulgaria, virtual apartment rent. He has a tax ID in both countries, and he told me that he pays taxes in Bulgaria (10% corp tax + 5% dividend tax), residing in Greece, and it's 100% legal.

I think I know that friend.

That setup seems moderately common for people that like the Balkans.

 

[Roo]

I think I know that friend.

That setup seems moderately common for people that like the Balkans.

I know a guy who does the same Greece + Bulgaria but he clearly said Greece doesn't know about his dealings with Bulgaria and crosses the border frequently to get cash from Bulgarian ATMs so legal, I think not so much but enforced probably not at all.