Recommendations please (AT resident)

[Cassidy]

Hi,

I am looking for some recommendations based on the following situation:

• Current resident in Austria
• Offer to work as a consultant for a swiss company (Income: ~200k EUR/year)
• Annual dividend income of 20k per year
• I would like a setup with low/no capital gains tax

I was thinking about Bulgaria as a self employed person with an effective income tax rate of 7.5% and a social security cap at ~6.2k/year as it is quite hassle free. I`d want to live outside of Bulgaria for 5 month though ;-)

What else would you suggest to take into consideration? Malta/ any interesting option with a US LLC? The tax residency should ideally be in a country in which the time difference to switzerland does not exceed 2 hours.

In case I would like to stay in Austria at least with either my first or my 2nd residence, what would be the best setup?

Thank you.

 

[CyprusLawyer101]

Cyprus appears to suit you well!
If you are interested to discuss this let me know and I can PM you. There is no charge for this consultation and you will obtain a fairly good idea of what options are available in Cyprus. Let me know if you are interested.

 

[Cassidy]

Thank you for your reply. I am not sure how to send you a PM, as I am new on this board. I am aware there is a special situation in the DTA between Austria and Cyprus and there is a potential setup with 3 companies. Can you please send me a PM and can we have the consultation?

 

[Marzio]

Cassidy said:
I am aware there is a special situation in the DTA between Austria and Cyprus and there is a potential setup with 3 companies.
Click to expand...

You can't make use of this setup because you will be actively working.

 

[Cassidy]

Thank you, Marzio. Good point. One important thing I forgot to mention: there is a potential one-time low 7-figure income from a lawsuit settlement, so this is quite a dominating factor here

Last edited: Dec 16, 2022

 

[Marzio]

How far do you live from Liechtenstein or Hungary? Since Austria has CFC rules only on passive income you could potentially form a company in Liechtenstein or Hungary and commute daily there. You'll pay low CIT and you have to check in DTA how dividends or salary is taxed but i guess, in particular in Liechtenstein, you could find some tax breaks. Unfortunately i can't tell you more since both DTA are in German.

 

[Cassidy]

Thanks Marzio, Liechtenstein would be an option as the swiss company is not too far away. Also, what would you recommend if the Swiss company would hire me (which would be possible)? I am also interested in making sure the swiss company`s overall cost stays low, not only my tax.

 

[Marzio]

There are a couple scenarios:

1. Swiss company will not hire you but pays you as a freelance consultant

a. You continue to be Austrain tax resident but commute everyday working for a Liechtenstein company that will invoice the Swiss company for the service you provide. Company will pay 12.5% CIT but not sure how dividends will be taxed in Austria according to DTA because it's written in German.

b. You move your tax residency in Cyprus forming a CY LTD. The company will pay 12.5% CIT and dividends will be tax free.

2. Swiss company will hire you as an employee

I. If the Swiss company will NOT require your daily presence:

a. You could move to Cyprus and use the 90 day rule.

II. If the Swiss company will require your daily presence:

b. Move to best possible canton tax wise in Switzerland.

 

[RealDude]

Out of self-interest: Are there really companies in Switzerland paying ~200k EUR/year for a 100% remote position abroad?

 

[Marzio]

RealDude said:
Are there really companies in Switzerland paying ~200k EUR/year for a 100% remote position abroad?
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Not really sure but who knows with the whole remote work movement it could be.

 

[Cassidy]

Thank you very much.

Yes, there are 🙂 . Well, I guess it all depends on the value of the service one creates.

In the case of being on the swiss company`s payroll, they would not require 100% presence (otherwise even the potential remote setup would not be viable..)

Would anything major change in the freelance/external company scenario if I´d be ~10-15% on-site in Switzerland to meet with the client?

 

[RealDude]

Scheinselbständigkeit (Bogus self-employment) klären lassen:

https://payrollplus.ch/rechtliches/scheinselbstaendigkeit-gefahren-fuer-unternehmen/

 

[Marzio]

Cassidy said:
Would anything major change in the freelance/external company scenario if I´d be ~10-15% on-site in Switzerland to meet with the client?
Click to expand...

An individual is deemed to be a tax-resident under Swiss domestic tax law if the individual stays in Switzerland with the intention to exercise gainful activities for a consecutive period (ignoring short absences) of at least 30 days.

https://taxsummaries.pwc.com/switzerland/individual/residence

RealDude said:
Scheinselbständigkeit (Bogus self-employment) klären lassen:
Click to expand...

This is only a problem if you are a CH tax resident freelancing for a CH company.

 

[RealDude]

marzio said:
This is only a problem if you are a CH tax resident freelancing for a CH company.
Click to expand...

Better double check if you stay in a DACH country.

 

[Marzio]

RealDude said:
Better double check if you stay in a DACH country.
Click to expand...

None of the solutions provided were about him being a freelancer so imho this problem simply doesn't exist.