What does distributed profits means?

[SoNewToAllShit]

Can you explain or draw what exactly distributed profits means?

I read it in a lot of threads where ppl try to gain 0% tax on profits, the latest I read was below:

10M outsourced services (33.3%) to Estonian company that does not distribute profits (0% tax)
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How does it work ?

 

[JohnnyDoe]

Distributed profits are those who are assigned (not necessarily paid) by a company to its shareholder(s) as dividends.

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[SoNewToAllShit]

Once company has paid corporate tax in Dubai, the rest can be send to the shareholders in Estonia without taxes.. the shareholder must be Estonia citizens to get tax free profits?

 

[JohnnyDoe]

SoNewToAllShit said:
Once company has paid corporate tax in Dubai, the rest can be send to the shareholders in Estonia without taxes.. the shareholder must be Estonia citizens to get tax free profits?
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You are making confusion. We were talking of profits of an Estonian company.
Estonian residents pay taxes on their worldwide profits.

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[SoNewToAllShit]

ohh. I see.. yes I'm confused about all of it.

How would it work with Dubai company and me live in Austria no company there? would I need an Estonia company?

 

[JohnnyDoe]

SoNewToAllShit said:
ohh. I see.. yes I'm confused about all of it.

How would it work with Dubai company and me live in Austria no company there? would I need an Estonia company?
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You need to pay taxes in Austria

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[JohnJ81]

can you not pay dividends to yourself living in Dubai tax free? after the corp tax is paid?

 

[JohnnyDoe]

JohnJ81 said:
can you not pay dividends to yourself living in Dubai tax free? after the corp tax is paid?
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That's a different story

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[SoNewToAllShit]

okay, now I think I understand it.

I can use distributed funds to the Estonia company once there tax free, I can reinvest it in other business! I don't need to take out the money for taxation!

Is Estonia the only country or Cyprus and UK LTD could work also?

 

[JustAnotherNomad]

SoNewToAllShit said:
I can use distributed funds to the Estonia company once there tax free, I can reinvest it in other business! I don't need to take out the money for taxation!
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No, you can't. You live in Austria, so the company has to follow the tax rules for Austrian companies, even if it is registered in Estonia.

 

[SoNewToAllShit]

What is I establish with office, staff and utility in Estonia?

 

[JustAnotherNomad]

SoNewToAllShit said:
What is I establish with office, staff and utility in Estonia?
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Sure, you can do that. If you're only a passive investor and can prove that you don't work for this company yourself, it might work. But then you have to pay for the office, staff etc. - is it really still worth it?