Difference between legal and personal taxation

[mgs999999999]

Hi guys,

I have the following question. Let's assume I own 2 companies where I am the unique employee and owner.

Company 1 is on country A where I am tax resident.

Company 2 is on country B where there is very little corporate tax and 0 income tax.

Let's assume that company 1 makes very little profit and almost all benefit goes to company 2. Company 1 pays taxes on the benefits on country A. I pay personal tax on country A.

Based on these, I have the following questions:

1) if the money does not exit company 2 meaning that it is money own by company 2 (not personal), but country A finds out I own the company 2 in country B, can country A ask me to pay the benefits from company 2 on country A?

2) is it dependent on the country or there are international les/rules for this situation? What does it depends on?

3) if company 2 spend the benefits buying some property on its name on country X and country A finds out, can I have any problem with country A?

4) if after N years, I move my tax residence to country B for one year to move the money from company 2 to my personal account (let's assume I spend 183 days there), can country A claim something to me?

Thanks a lot in advance!

Best wishes,

 

[Sols]

mgs999999999 said:
Hi guys,

I have the following question. Let's assume I own 2 companies where I am the unique employee and owner.

Company 1 is on country A where I am tax resident.

Company 2 is on country B where there is very little corporate tax and 0 income tax.

Let's assume that company 1 makes very little profit and almost all benefit goes to company 2. Company 1 pays taxes on the benefits on country A. I pay personal tax on country A.
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Look into BEPS: Base Erosion and Profit Shifting. Laws and rules have been written to prevent exactly this.

mgs999999999 said:
1) if the money does not exit company 2 meaning that it is money own by company 2 (not personal), but country A finds out I own the company 2 in country B, can country A ask me to pay the benefits from company 2 on country A?
Click to expand...

Yes, or some other form of penalty.

mgs999999999 said:
2) is it dependent on the country or there are international les/rules for this situation? What does it depends on?
Click to expand...

BEPS is an international standard but you need to look at the laws of each specific jurisdiction involved.

mgs999999999 said:
3) if company 2 spend the benefits buying some property on its name on country X and country A finds out, can I have any problem with country A?
Click to expand...

Yes.

mgs999999999 said:
4) if after N years, I move my tax residence to country B for one year to move the money from company 2 to my personal account (let's assume I spend 183 days there), can country A claim something to me?
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Yes.

Toggle signature
This is the probably the answer to your question.

 

[mgs999999999]

Thank you! Wow. I see that Cyprus is not in the list. Does that mean that I would not have issues if Cyprus is involved?

 

[Sols]

mgs999999999 said:
Wow. I see that Cyprus is not in the list.
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What list?

Toggle signature
This is the probably the answer to your question.

 

[TheCryptoAnt]

Yes to all but 2, you might get away with it depending on the country where you live. Not because it follows the rules but rather because the place might be mismanaged.

Share the name of the countries for a better answer.

btw point 4 is lolz

 

[mgs999999999]

TheCryptoAnt said:
Yes to all but 2, you might get away with it depending on the country where you live. Not because it follows the rules but rather because the place might be mismanaged.

Share the name of the countries for a better answer.

btw point 4 is lolz
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Country 1 Andorra
Country 2 Dubai

Sols said:
What list?
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This list (based on the message you sent) I found the list of countries where I made the assumption that I would have a problem doing what I asked:

https://www.oecd.org/tax/beps/
Is it correct to assume that because Andorra and uae are in the list, I should not do what I asked?

Best wishes,

 

[TheCryptoAnt]

mgs999999999 said:
Country 1 Andorra
Country 2 Dubai
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Gotcha.

Andorra is not particularly mismanaged, specially in tax terms, so i wouldn't bank on them being stupid.
Now this being said most free zones in Dubai don't have a public registry so ur name dont appear publicly anywhere.

Are your clients in Andorra?

This could be done if you dont open your mouth much but point 4 is still not a possibility specially if you move just one year

 

[mgs999999999]

TheCryptoAnt said:
Gotcha.

Andorra is not particularly mismanaged, specially in tax terms, so i wouldn't bank on them being stupid.
Now this being said most free zones in Dubai don't have a public registry so ur name dont appear publicly anywhere.

Are your clients in Andorra?

This could be done if you dont open your mouth much but point 4 is still not a possibility specially if you move just one year
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All my clients are from the USA.

0 clients from Andorra
0 clients from UAE

 

[TheCryptoAnt]

mgs999999999 said:
All my clients are from the USA.

0 clients from Andorra
0 clients from UAE
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yeah i dont see why you couldnt pull this, honestly.

dont brag, dont flash, etc... and enjoy. Theres tons of info RE Dubai and how it works here in the forum.
Enjoy!

 

[Chonsai]

@mgs999999999 you worded this really well, I would like to borrow your question for my own situation, hope you don't mind!

Company 1: Panama
Company 2: Hong Kong/Isle of Man/Some other 0% tax jurisdiction
Personal tax residence: Thailand

Company 1 makes most of the money, company 2 can make a little. I won't remit funds to Thailand in the year they're earned, but will be paying myself in dividends/salary (tax free I believe, since foreign companies in Thailand).

Despite me not explicitly being able to work with the Thai elite visa it's my understanding that they won't care/know/notice if I keep it strictly out of Thailand.

@Sols you mention BEPS and all the above countries at on that list, however I feel like Thailand might be mismanaged. @TheCryptoAnt have you got an opinion on Thailand's management?

:') thank you hope it's ok for me to ask.

 

[TheCryptoAnt]

Chonsai said:
@TheCryptoAnt have you got an opinion on Thailand's management?

:') thank you hope it's ok for me to ask.
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you are more than free to do whatever you want in TH, nobody gives an absolute f**k.

 

[mgs999999999]

TheCryptoAnt said:
you are more than free to do whatever you want in TH, nobody gives an absolute f**k.
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Could please elaborate a bit more?

Chonsai said:
@mgs999999999 you worded this really well, I would like to borrow your question for my own situation, hope you don't mind!

Company 1: Panama
Company 2: Hong Kong/Isle of Man/Some other 0% tax jurisdiction
Personal tax residence: Thailand

Company 1 makes most of the money, company 2 can make a little. I won't remit funds to Thailand in the year they're earned, but will be paying myself in dividends/salary (tax free I believe, since foreign companies in Thailand).

Despite me not explicitly being able to work with the Thai elite visa it's my understanding that they won't care/know/notice if I keep it strictly out of Thailand.

@Sols you mention BEPS and all the above countries at on that list, however I feel like Thailand might be mismanaged. @TheCryptoAnt have you got an opinion on Thailand's management?

:') thank you hope it's ok for me to ask.
Click to expand...

Thanks! Don't worry we are all here to learn 🙂

 

[TheCryptoAnt]

mgs999999999 said:
Could please elaborate a bit more?
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Run any company you want, pay yourself whatever you want, etc.
0 fucks given if u white (or Westerner rather)

Go enjoy fr

 

[wellington]

TheCryptoAnt said:
Run any company you want, pay yourself whatever you want, etc.
0 fucks given if u white (or Westerner rather)

Go enjoy fr
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T's true, if they started, they'd see the property sector collapse, and their economy directly after as Phuket, Pattaya, Hua Hin and Samui became ghost towns.

That idiot Anutin "Dirty Farang" during Covid caused a lot of damage, and it's still not recovered.

 

[TheCryptoAnt]

wellington said:
T's true, if they started, they'd see the property sector collapse, and their economy directly after as Phuket, Pattaya, Hua Hin and Samui became ghost towns.

That idiot Anutin "Dirty Farang" during Covid caused a lot of damage, and it's still not recovered.
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Thais will do ANYTHING in order to save face and not recognize a fuckup. Its quite comical after some time lmao