My social circle is only with foreigners. No, been in Georgia for business, just after protestations against Russians. I don't find it was a so big event. If people are more and less poor in the country you choose, it means also, you will be much more rich than in EU, think about that.
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Why risk offshore? Just pay some taxes
- Thread starter jenhuang30
- Start date
In such case I think more that it's unsafe to have a lot of money in a poor country
no difference, just wanted to know if you don’t feel that you changed your social circle for money
Yes of course, you can buy everyone, you cannot trust anyone, you have the money, you are a big wallet walking around... all friendships will be fake and no real integration....
seems like you don't realize the whole picture - there is no country in EU where the state takes less than 50% from your business profit (corporate tax + dividends tax + VAT on consumption) + many other more hidden taxes (fuel, properties, alcohol, ...)
on average I'd say it's like 70% effective taxation (much more in ridiculous countries like France for example)
this money is involuntarily taken from you, used for financing stuff you wouldn't ever buy or support and in return you're given something insanely overpriced what you mostly don't need and paying these thing for those who can't afford it (the magic words are "solidarity" and "equality")
you're living in an ilusion of stability, order and safety that works only because there is a state monopoly for violence and printing valueless papers called money
for all that you're told you should be grateful and behave
MAFIA uses exactly the same scheme
not everyone can leave but if you can just run as soon as possible because soon they will not let you go for free
There are some, like Bulgaria where corporate tax is 10%, dividends tax 5%, VAT 20%, which is one third less than 50%. It's certainly not HK, but what options are left if one doesn't like asian lifestyle?
it is very true unfortunately
my bad, you're probably right, on the other hand it doesn't change much since Bulgaria isn't for sure the country OP would like (you know... gangsters, instability :-D, no offense, just kidding)
it's not about what one likes or doesn't like any more I'm afraid
how about Panama, Belize, Mauritius?
it's all about life balance and personal comfort
they are at the bottom of the world safety rating. no one likes paying taxes but sacrifice life and health for the sake of 20% is not the best solution
I must comment a bit..
Unfortunately, some EU countries limit the amount of profit (dividents) that can be taxed as capital gain. The rest is taxed as income with much higher rate. So just looking at capital gain tax rate doesn't tell the whole picture.
Also, unfortunately, income tax rate doesn't tell the whole picture. Many of the "low tax" countries in EU, such as Estonia, have very high mandatory social security payment rates. In Estonia, employer pays 33,6% from the salary to the state - and worker pays the income tax from the salary. So real payroll tax is much higher than advertised 20%.
We also can't forget, that many EU countries have mandatory salary requirement for company managers - or at least mandatory payment of social security contributions from minimum salary. This means, owning a company in EU is not always not so cheap.
Some countries also do not accept situation where the owner/manager doesn't get salary but lives from dividents. Claim is that the manager should get paid the same amount (with full social security contributions + income tax) as non-owner doing the same "management work" for the company. Make sense, but makes also "our" lives more expensive.
So we can't just look at the tax rates when comparing countries. This is something many "offshore boys" like nomad capitalist is doing and thus missleading the public. The real world is much more complicated and you need to study much more.
Few suggestions:
1) choose a country where you LIKE to live as a resident
2) pay small, but beliavable salary which entitles you to social security if something bad happens
3) consider "high tax" country where taxable minimum is rather high
4) find out legal ways to get tax-free money out from your company (travel allowances etc) - use them in full
5) spend your tax free money abroad while travelling, not to attract too much attention at home
6) use safe, low-tax countries to invest extra income (with local holding companies) in real estate
7) use few cheap offshore structures to get extra travel money (but not in huge amounts to lower risk)
8) travel a lot and enjoy life
Unfortunately, some EU countries limit the amount of profit (dividents) that can be taxed as capital gain. The rest is taxed as income with much higher rate. So just looking at capital gain tax rate doesn't tell the whole picture.
Also, unfortunately, income tax rate doesn't tell the whole picture. Many of the "low tax" countries in EU, such as Estonia, have very high mandatory social security payment rates. In Estonia, employer pays 33,6% from the salary to the state - and worker pays the income tax from the salary. So real payroll tax is much higher than advertised 20%.
We also can't forget, that many EU countries have mandatory salary requirement for company managers - or at least mandatory payment of social security contributions from minimum salary. This means, owning a company in EU is not always not so cheap.
Some countries also do not accept situation where the owner/manager doesn't get salary but lives from dividents. Claim is that the manager should get paid the same amount (with full social security contributions + income tax) as non-owner doing the same "management work" for the company. Make sense, but makes also "our" lives more expensive.
So we can't just look at the tax rates when comparing countries. This is something many "offshore boys" like nomad capitalist is doing and thus missleading the public. The real world is much more complicated and you need to study much more.
Few suggestions:
1) choose a country where you LIKE to live as a resident
2) pay small, but beliavable salary which entitles you to social security if something bad happens
3) consider "high tax" country where taxable minimum is rather high
4) find out legal ways to get tax-free money out from your company (travel allowances etc) - use them in full
5) spend your tax free money abroad while travelling, not to attract too much attention at home
6) use safe, low-tax countries to invest extra income (with local holding companies) in real estate
7) use few cheap offshore structures to get extra travel money (but not in huge amounts to lower risk)
8) travel a lot and enjoy life
if it's about your personal non-trivial experience then I respect that
if it's just about your feelings and intuition you should probably travel and find out, maybe have a look at some more or less reputable ratings (they work much better for small countries) like this Rankings :: Legatum Prosperity Index 2018 - you'll maybe find out that prejudice is not a good advisor here
Mauritius is surely more secure (considering personal safety) than many countries in EU (not speaking about specific regions or big cities that are incomparably worse)
Living in the high tax black zone is worse, .. stress, problems, etc. also the regulations and laws are dramatically changing.. Do not you think so?
For some countries it's own experience for some only feedback based opinion and intuition. The site you shared is very interesting, I use numbeo.com, and both of these sites consider Panama, Belize and the whole central and south America to be unsafe region.
let's be honest neither you nor me will live in Mauritius for a half a year to maintain a residency there
This is such BS. Grey zone? Stress? You guys watch to many science fiction
I do not disagree that EU is high-taxed and overregulated... However your numbers do not make sense, you cannot just add these percentages up. They are percentages of different amounts. In your example let's say company profits 1000 and decides to pay out everything through dividend. First corporate tax really is 25%, then withholding divi tax would be 0,05*0,75=3,75% from the initial amount, personal income would be 0,2*0,7125=14,25% from the initial amount, VAT would be 0,57*0,2=11,4% of the initial amount. So the total tax burden in your example is 54,4% (which actually matches some Western European countries very closely). For most people this amount can be deducted by some fixed amount/discount.
I wonder what is more "risky" these days. Living in France, paying 60% tax, going on a strike occasionally and pretending the world is fine? Or deciding to get out and choosing another country to live in?
You mention "stress", isn't that what is necessary in live? So many people choose to live a stress-free life and end up in some corporation doing some bulls**t like selling insurance. You need some stress in your life, and I even think that living in an "instable" country can open eyes to you. I'm not saying you should move to Tajikistan and spend rest of your life there but getting out of your nice and comfy country can really be eye opening. Do you know how many Americans never even travelled outside the US?
Effective taxation is not 70%, even in Denmark, France or Sweden it is more like 50-55%. Yes, it is ridiculously high but not that high. Remember the Laffer curve, if you increase taxes too high, people will tell you to f**k off. I think there are some low-tax countries (Andorra, Monaco, actually even Switzerland is relatively low-tax). I admit it's true that low-tax countries often have hidden fees which you only notice after you actually live there.
This is how it worked for the past at least 5000 years, someone has rule over a territory (pharaoh, king, nobleman, a "democracy") and uses repressive forces to enforce his interests. Only in the past it was more honest (a sheriff/reeve came to your house and took some gold coins), now it is more
unostentatious (inflation, insurance, sector tax, solidarity tax, currency interventions, subsidies, wealth transfer tax, inheritance tax) so people don't realize it. I don't know any good solution or substitution for this system. I guess a country/national state is still better than tribes and lords fighting with each other...
However, a change may be coming (just look at Bitcoin and other stuff), yet there are people believing in the fairness and rightness of the system and these will be most threatened (there is a "social contract between state and citizen", "state will take care of you", "state will protect you", "you will have retirement", "we will protect you from your idiocy").
Actually it's exciting that today you really can leave and go elsewhere because in 99% of the history you didn't have such options or they were very limited.
I find it ridiculous that people have these opinions about other countries (be it Panama, Belize, Brazil, Georgia) based on a rumour or a Wikipedia statistics. If you behave like a retard, you can get into trouble in Sweden as easily as in Panama. Why exactly would it be an unsafe country? Nothing is about "comfort" or "life balance", these are meaningless middle-class buzzwords. You shouldn't expect to just live in comfort and that's it. Yes, it is possible but will that be a life worth living?
Your math has some issue. You need to start with subtracting the vat.
Denmark for example, 1000 income of which vat is 200, then taxable profit is 800. If total profit tax is 50%, then that's 400, so your left with 400 (60% total taxes).
Then when you spend those 400 you are paying 80 of those in vat again
Denmark for example, 1000 income of which vat is 200, then taxable profit is 800. If total profit tax is 50%, then that's 400, so your left with 400 (60% total taxes).
Then when you spend those 400 you are paying 80 of those in vat again
This is exactly what I mentioned is wrong in the calculation. OP wrote that he pays VAT as a consumer (see point #4) so your logic is wrong and your calculation is meaningless. OP pays (indirectly) VAT as a consumer of services and he uses his already taxed money for it. Do not write nonsense.
Hello guys,
here the proper calculaton:
100,000 EUR
25,000 EUR (Corp Tax)
75,000 EUR into LTD Bank Account
A) IF Salary to myself as Director -> Progressive Taxes + Social Insurance
B) If Dividend to myself another 20% - 30% of 75,000 EUR Dividend Tax + Social Insurance
here the proper calculaton:
100,000 EUR
25,000 EUR (Corp Tax)
75,000 EUR into LTD Bank Account
A) IF Salary to myself as Director -> Progressive Taxes + Social Insurance
B) If Dividend to myself another 20% - 30% of 75,000 EUR Dividend Tax + Social Insurance
Another reason to why some want to go offshore may be privacy and to make it less attractive to anyone to sue a company for some reason 
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