Czech Republic Tax Optimization

[Mieses]

Hey All!

I currently run a company in the Czech Republic. Browsing the forum over the past weeks, I realised it makes no sense for me to incorporate an offshore company and scam the tax office by breaking PE and CFC laws.

My business is in the digital advertising space, it is a platform for publishers to monetise their site.

Yearly, I have about 20 Mil CZK turnover, and about 15 Mil CZK profit. I know it is not such a big amount for many of the users here but I think it's still pretty good for an SME. The business is 2-10 employees.

I would like to know if anybody here has experience with optimizing taxes legally here in CZ or in countries with similar laws (or some approaches that are more general and can work without looking at jurisdiction)

I already tried consulting with 1 tax firm but they took a relatively high consultation fee and did not suggest anything interesting. My background is in accounting so I already know the basic stuff which is pretty much all that they suggested. I just want to hear if there are any better approaches or considerations bcs I do not really enjoy paying 20% CIT and then 15% dividend (total 32% to get the money) to that greedy state which takes and never will give anything in return.

Thank you in advance for the advice

 

[CyprusLawyer101]

Where are you resident?

 

[Mieses]

CyprusLawyer101 said:
Where are you resident?
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I am resident in the Czech Republic, the employees are local and I would prefer to make use of some options here.

 

[CyprusLawyer101]

Mieses said:
I am resident in the Czech Republic, the employees are local and I would prefer to make use of some options here.
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Wherefrom are your clients?

 

[Mieses]

CyprusLawyer101 said:
Wherefrom are your clients?
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Ireland, Poland, Czech Republic, Italy, Netherlands, UK and US

 

[CyprusLawyer101]

Hm.. is this a stand alone company? it might be worth it taking a look at the operation

 

[Mieses]

CyprusLawyer101 said:
Hm.. is this a stand alone company? it might be worth it taking a look at the operation
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Could you please explain what this question is? Or contact me in private messages please?

 

[void]

Mieses said:
Hey All!

I currently run a company in the Czech Republic. Browsing the forum over the past weeks, I realised it makes no sense for me to incorporate an offshore company and scam the tax office by breaking PE and CFC laws.

My business is in the digital advertising space, it is a platform for publishers to monetise their site.

Yearly, I have about 20 Mil CZK turnover, and about 15 Mil CZK profit. I know it is not such a big amount for many of the users here but I think it's still pretty good for an SME. The business is 2-10 employees.

I would like to know if anybody here has experience with optimizing taxes legally here in CZ or in countries with similar laws (or some approaches that are more general and can work without looking at jurisdiction)

I already tried consulting with 1 tax firm but they took a relatively high consultation fee and did not suggest anything interesting. My background is in accounting so I already know the basic stuff which is pretty much all that they suggested. I just want to hear if there are any better approaches or considerations bcs I do not really enjoy paying 20% CIT and then 15% dividend (total 32% to get the money) to that greedy state which takes and never will give anything in return.

Thank you in advance for the advice
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as your background is in accounting you're probably aware of the possibility of working with doubled "research & development" expenses.... which (in my opinion) is in the end the only reasonable legal way to optimize in Czech environment in case you're able to justify it in respect to your business

the rest of the efficient options is in the grey/black area

 

[CyprusLawyer101]

Mieses said:
Could you please explain what this question is? Or contact me in private messages please?
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I mean if there is another company in the operation or its just one company

 

[Mieses]

CyprusLawyer101 said:
I mean if there is another company in the operation or its just one company
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Just one company for the main activity. There is a second CZ company that is used when it is preferable to not have a VAT invoice (it doesn't cross the 2 Mil CZK mark to become a VAT payer). But practically all of the activity is carried out within the main one, yes.

void said:
as your background is in accounting you're probably aware of the possibility of working with doubled "research & development" expenses.... which (in my opinion) is in the end the only reasonable legal way to optimize in Czech environment in case you're able to justify it in respect to your business
Click to expand...

Yes, I'm aware of Výzkum a Vývoj, but I considered that as part of the basic strategies; I can't really make use of it that much atm in a way that I gain from.

void said:
the rest of the efficient options is in the grey/black area
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And what would the grey area options be? 😉

 

[Marzio]

Mieses said:
I currently run a company in the Czech Republic
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Are you willing to move?

 

[Mieses]

Marzio said:
Are you willing to move?
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Willing to, but would prefer not to move.

I'm fine letting the state steal from me a bit, just would prefer to make it a bit less than the 20% + 15% as currently (amounts to 32% now). I'd be OK paying <25% total.

 

[daniels27]

As I stated many times. Apart from a few exceptions, they is no point of incorporating elsewhere when you reside in the EU.

You would have to move at least a director it all of your employees to another country. Trust me, it is good for your soul to move yourself. Most if Europe's wealth comes from emigration, immigration and other form of movement of people. Switzerland was a dirty poor place until the citizens went to the US and German academics and industry came.

 

[Mieses]

daniels27 said:
As I stated many times. Apart from a few exceptions, they is no point of incorporating elsewhere when you reside in the EU.

You would have to move at least a director it all of your employees to another country. Trust me, it is good for your soul to move yourself. Most if Europe's wealth comes from emigration, immigration and other form of movement of people. Switzerland was a dirty poor place until the citizens went to the US and German academics and industry came.
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Hi Daniels,

I know - and I never asked about incorporating elsewhere. I even said I don't plan on opening a company elsewhere because it would be a waste of time and I would be triggering PE and CFC anyway.

I'd consider moving, but I have a decent amount of real estate here in the country, maybe sometime in the future. It would also be pretty difficult to move the team over.

I'm just trying to find options to legally decrease the tax burden by any amount, I know it's not a possibility to get to near-zero living here in the EU.

 

[daniels27]

Mieses said:
Hi Daniels,

I know - and I never asked about incorporating elsewhere. I even said I don't plan on opening a company elsewhere because it would be a waste of time and I would be triggering PE and CFC anyway.

I'd consider moving, but I have a decent amount of real estate here in the country, maybe sometime in the future. It would also be pretty difficult to move the team over.

I'm just trying to find options to legally decrease the tax burden by any amount, I know it's not a possibility to get to near-zero living here in the EU.
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If you have family, then get them to sign up as self employed and stuck out some profit that way. Or invoice the US sales from a Bulgarian company, this usually works for quite some years in the EU.

 

[void]

Mieses said:
And what would the grey area options be? 😉
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let's just say, my anarchocapitalist friend 😉, that you don't have to tax something you didn't earn - in your business area one can obviously have many subcontractors (both local "OSVC" and foreign companies who have more favorable tax setup) willing to help with your burden

to be clear... I'm definitely not suggesting anything 😀
DM me if you want to THEORETICALLY discuss this

 

[Mieses]

void said:
let's just say, my anarchocapitalist friend 😉, that you don't have to tax something you didn't earn - in your business area one can obviously have many subcontractors (both local "OSVC" and foreign companies who have more favorable tax setup) willing to help with your burden

to be clear... I'm definitely not suggesting anything 😀
DM me if you want to THEORETICALLY discuss this
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"The following recipients have reached their maximum allowed inbox limit: void."

Are you able to do something with that?

 

[void]

Mieses said:
"The following recipients have reached their maximum allowed inbox limit: void."

Are you able to do something with that?
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no idea...

and I cannot DM anyone at this moment for some reason but I was allowed to in the past
maybe admins can help/explain

 

[Mieses]

void said:
no idea...
View attachment 6657
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void said:
and I cannot DM anyone at this moment for some reason but I was allowed to in the past
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That makes sense because you need Mentor Group Gold to message, but I bought it and still cannot message you because of that inbox thing.

void said:
maybe admins can help/explain
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@JohnLocke can you chěck this please?

 

[CyprusLawyer101]

If certain restructuring is possible within your operation , you could be restructuring in a way in which operations are allocated offshore and tax savings are achieved.