Irish Company Tax Rate of 12.5%: is it possible to get it without living in Ireland?

[BerlusconiSchmidt]

I read that Ireland lowest corporate Tax rate is 12.5% if the majority of the directors resides in Ireland.
Well, Ireland is expensive, is there a way to live within the Eurozone (e.g: Romania or Bulgaria) and operate an Irish company
with the lower 12.5% Tax rate, and get paid in dividends only since the Dividend tax rates in Romania/Bulgaria are less than 12.5%?

Unfortunately I am the only one running my own online business, and I am a EU national, hence I can live anywhere in Europe,
but not Ireland (weather, housing cost, far from everything).

 

[Marzio]

BerlusconiSchmidt said:
is there a way to live within the Eurozone (e.g: Romania or Bulgaria)
Click to expand...

If you're the only one running the show and willing to live in BG i would probably speak with @Don

He discussed a setup where an Estonian company with a Bulgarian branch in a tax exempt territory could lead to a 0% taxation.

Apparently if you establish a business in specific areas in Bulgaria, you are exempt from CIT and dividends distributed by Estonian companies are exempt from corporate income tax if these are paid out of profits derived through a permanent establishment (“PE”) in the EU, EEA.

https://www.fin.ee/en/taxes#corporate-income-tax

 

[Don]

Marzio said:
If you're the only one running the show and willing to live in BG i would probably speak with @Don

He discussed a setup where an Estonian company with a Bulgarian branch in a tax exempt territory could lead to a 0% taxation.

Apparently if you establish a business in specific areas in Bulgaria, you are exempt from CIT and dividends distributed by Estonian companies are exempt from corporate income tax if these are paid out of profits derived through a permanent establishment (“PE”) in the EU, EEA.

https://www.fin.ee/en/taxes#corporate-income-tax
Click to expand...

This doesn't really work with online business, but an Estonian company with a Bulgarian branch could still avoid the 5% WHT that would otherwise be the case with the Bulgaria residency + company setup (15%), resulting in just 10% tax on the Bulgaria profits

5-10% total effective tax and living in Europe is doable.
The real question is, where do you want to be a resident?

Bulgaria and Romania are not in the Eurozone but have their own currencies (which can add some extra costs when you convert).

Maybe consider even something like Albania or Kosovo? Kosovo, despite not being in the Eurozone at least has Euros. Same with Montenegro.
According to Numbeo, you would need around 1,991.7€ in Pristina, Kosovo, to maintain the same standard of life that you can have with 6,100.0€ in Dublin, Ireland (assuming you rent in both cities)

Last edited: Apr 22, 2024

 

[Marzio]

Don said:
This doesn't really work with online business
Click to expand...

Why not?

 

[MikeDem]

We opened an Irish company. The only requirement is to have one of the directors UE citizen.
We have an agency there that takes care of the admin stuff, and a PO address.
Very easy to set up.

 

[Don]

Marzio said:
Why not?
Click to expand...

Maximum 100% corporate income tax relief is provided to manufacturers in underdeveloped areas.

 

[2fire]

Dear Don,
Are you aware of there is any EU grants for manufacturing business in BG with financing 85% or similar?

 

[BerlusconiSchmidt]

MikeDem said:
We opened an Irish company. The only requirement is to have one of the directors UE citizen.
We have an agency there that takes care of the admin stuff, and a PO address.
Very easy to set up.
Click to expand...

And were you able to be eligible for the lower 12.5% Corporate tax rate or are you paying the full scam 25% rate? if so, how?

Don said:
This doesn't really work with online business, but an Estonian company with a Bulgarian branch could still avoid the 5% WHT that would otherwise be the case with the Bulgaria residency + company setup (15%), resulting in just 10% tax on the Bulgaria profits

5-10% total effective tax and living in Europe is doable.
The real question is, where do you want to be a resident?

Bulgaria and Romania are not in the Eurozone but have their own currencies (which can add some extra costs when you convert).

Maybe consider even something like Albania or Kosovo? Kosovo, despite not being in the Eurozone at least has Euros. Same with Montenegro.
According to Numbeo, you would need around 1,991.7€ in Pristina, Kosovo, to maintain the same standard of life that you can have with 6,100.0€ in Dublin, Ireland (assuming you rent in both cities)
Click to expand...

I'm ok living in Bulgaria or Romania (Bucharest is better than Sofia from what I have seen) however Kosovo or Albania not even if you pay me 😀

As long as I can pay less than 12.5% taxes anywhere, I'm okay. i was looking into Ireland due to the strong banking system and English speaking country to set up the company,
Estonia falls a bit out of scope.


Is there a way to operate under an Irish company, be eligible for the 12.5% Tax rate without actually any directors living in Ireland but living within the European Union?
Then paying those retained profits (minus the 12.5% tax) as a Dividend to your self?

Last edited: Apr 23, 2024

 

[Don]

BerlusconiSchmidt said:
And were you able to be eligible for the lower 12.5% Corporate tax rate or are you paying the full scam 25% rate? if so, how?


I'm ok living in Bulgaria or Romania (Bucharest is better than Sofia from what I have seen) however Kosovo or Albania not even if you pay me 😀

As long as I can pay less than 12.5% taxes anywhere, I'm okay. i was looking into Ireland due to the strong banking system and English speaking country to set up the company,
Estonia falls a bit out of scope.


Is there a way to operate under an Irish company, be eligible for the 12.5% Tax rate without actually any directors living in Ireland but living within the European Union?
Then paying those retained profits (minus the 12.5% tax) as a Dividend to your self?
Click to expand...

It might be possible to operate in Ireland with a branch office of a foreign company in Ireland paying just 12.5% CIT.

Irish branches of foreign companies are liable to corporation tax at the rates that apply to Irish resident companies. No tax is withheld on repatriation of branch profits to the head office.

 

[Marzio]

Don said:
It might be possible to operate in Ireland with a branch office of a foreign company in Ireland paying just 12.5% CIT.
Click to expand...

I wonder if by operating a IE branch of an Estonian company he could get dividends tax free by being non-dom in Ireland

 

[Don]

Marzio said:
I wonder if by operating a IE branch of an Estonian company he could get dividends tax free by being non-dom in Ireland
Click to expand...

Theoretically, it is possible, assuming the company passes, at the very least, the management and control test and is not considered a tax resident in Ireland.

 

[Marshal]

BerlusconiSchmidt said:
I'm ok living in Bulgaria or Romania (Bucharest is better than Sofia from what I have seen) however Kosovo or Albania not even if you pay me 😀
Click to expand...

I was just about to write a similar response and you beat me to it thu&¤# For around €2k per month you can live a pretty good life in Sofia. Who needs Kosovo, or Albania.