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.

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[ActionMan]

No, not enforced‌ in the UAE, nor Mexico.
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 their︀ tax bible. but Greece, Cyprus or Malta? not so much.

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

 

[Sols]

PE and similar‌ (tax residence), yes.

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, and︀ have a lawyer make sure you don't get completely hosed. But this is better than︁ waiting for them to finish their investigation. You know how AI chatbots hallucinate and confidently︂ present incorrect informations? Tax authorities also hallucinate a lot. They are content with a rough︃ estimate that's rounded up following some templates/models they work with. Then it's up to you︄ to fight them. But the invoice is due within 30 days anyway.

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

That's because︉ you don't hear about the smaller cases. Most tax law enforcement actions don't become public︊ 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]

#Bingooooooooooo

 

[clemens]

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 think I know that friend. hap¤#"

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

 

[Roo]

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.