Selling products to private persons in EU with offshore

[Lejan86]

Hello!

I am searching for a good solution about the following case:

i am prducing plastic pistol holsters. right now iam using my personal bank account to receive the payments via paypal from my customers (they are only private persons).
My turnover is around 25000 USD in every month.
Do you think i can use offshore for this kind of business?

Iam thinking to establish a HK company with bank account. The customers can order the products from the website of my HK company, the pay via paypal and i send the product from my country. Thanks a lot.

 

[JohnLocke]

What exactly is it you try to achieve with this setup if you don't mind to explain further?

If you just need a business account for your company you can set up one with Transferwise in minutes.

 

[Lejan86]

Hello Admin!

i want the HK company for not paying the local VAT and the company taxes in my country.

 

[Gediminas]

Hello Admin!

i want the HK company for not paying the local VAT and the company taxes in my country.

Hi, what is your tax residency?

 

[Lejan86]

Hi, what is your tax residency?

iam tax resident in Hungary.

 

[Sols]

Unless you set up an office and warehouse in Hong Kong, you're going to be considered tax resident in Hungary.

What you're describing just isn't realistic and sustainable anymore.

Hungary already has some of the lowest taxes in the EU. Take advantage of that. Be compliant.

If you plan to dodge EU VAT, know that you're not just violating Hungarian law. You're violating law in places like UK, Germany, Spain, and France which can and will go hunt you across the world. I've seen EU tax authorities send VAT invoices to offshore companies controlled from EU and they are not pretty.

 

[Gediminas]

iam tax resident in Hungary.

Send me an email if you need any help with incorporating and opening accounts. Happy to discuss your situation! HK isn't your only solution.

Unless you set up an office and warehouse in Hong Kong, you're going to be considered tax resident in Hungary.

Keep in mind this.

 

[Martin Everson]

iam tax resident in Hungary.

So your trying to avoid the small 9% corporate tax rate is that right...lol?

 

[Lejan86]

Hello Everyone,

The corporate tax is not so much. But the VAT is the highest in the EU. Its 27.

If you order similar product from Ebay ( China) than you dont have to pay VAT because the chineese seller write fake price on the bill and the package is too small. Therefore the custom office do not make custom clearance on the chineese goodie (what the customer ordered from ebay or aliexpress.

 

[John Andrews]

I've seen EU tax authorities send VAT invoices to offshore companies controlled from EU and they are not pretty.

How do they find out your revenue if your accounts aren't public?

 

[Sols]

How do they find out your revenue if your accounts aren't public?

The cases I've seen first hand have been jurisdictions with wholly or partially public figures. The invoices aren't necessarily correct, which is part of the plan.

I have heard about tax authorities doing wild estimates (probably based on what they find in customs) and sending massive invoices, putting you in a position of having to prove that they are wrong. They thereby force you to pay, disclose your financials, or try to prove you don't have to pay.

Hello Everyone,

The corporate tax is not so much. But the VAT is the highest in the EU. Its 27.

If you order similar product from Ebay ( China) than you dont have to pay VAT because the chineese seller write fake price on the bill and the package is too small. Therefore the custom office do not make custom clearance on the chineese goodie (what the customer ordered from ebay or aliexpress.

First, it's not that you don't have to pay VAT. It's that the tax and customs authorities are being lied to.

What you describe doesn't fly in EU countries where customs are more efficient than in Hungary. As soon as a package from outside EU/EEA lands in for example Germany or Sweden, there is a very high probability that it'll be screened and opened, regardless of the stated value on the invoice.

Second, you don't pay Hungarian VAT on items sold to other EU/EEA countries. For the turnover you're looking at, you'll be required to pay VAT where your customer is located. So if you send something to a customer in Germany, it's 19% VAT.

EU VAT is messy, though, so it'd be wise to sit down with a tax adviser to make sure you do it correctly.

Again, we're not just talking about dodging Hungarian tax law. You risk stepping on toes of far more powerful and competent tax authorities.

 

[Bandito]

Export your goods to a country outside of the EU with zero percentage VAT.

Get a guy to sell them from there for you.

 

[Joe Blasco]

let s say you sell for 50 $ and you have a revenue of 25000 $ you are selling 500 units per month, not even the biggest gunstores in Finland or Czechia didn t have so much orders for a holster each month...

 

[Sols]

Export your goods to a country outside of the EU with zero percentage VAT.

Get a guy to sell them from there for you.

Doesn't matter. As long as you sell into the EU, you still to pay VAT, even if you're not in the EU. For small businesses, they might not go after you but it's a risk nonetheless. Depends whose toes you step on.

 

[Jaydo]

Can you not charge the customers VAT based on their country?