Totally true. But do you think he will come back to answer the question of @EliasIT
https://www.offshorecorptalk.com/threads/easy-0-vat-jurisdiction-needed.44958/post-315133
Easy 0 VAT Jurisdiction Needed
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https://www.offshorecorptalk.com/threads/easy-0-vat-jurisdiction-needed.44958/post-315133
I think there is a lot of misinformation in this thread.
For Ad Spend it makes total sense to do it from a jurisdiction where you don't have to pay VAT on it.
Ad Spend can go into the millions per year quickly.
Why would you pay an additional 20% and then claim it back a year after that?
Very bad for cashflow.
OP specifically asked for Ad Spend, not for VAT on Sales. That's another thing.
There is nothing wrong with having the Ad Spend on one company and Sales on another company...
To answer OP question:
US LLC (cheapest)
HK Limited
For Ad Spend it makes total sense to do it from a jurisdiction where you don't have to pay VAT on it.
Ad Spend can go into the millions per year quickly.
Why would you pay an additional 20% and then claim it back a year after that?
Very bad for cashflow.
OP specifically asked for Ad Spend, not for VAT on Sales. That's another thing.
There is nothing wrong with having the Ad Spend on one company and Sales on another company...
To answer OP question:
US LLC (cheapest)
HK Limited
You are missing some points.
- If your VAT expense is high, your filling will quickly be monthly. Hence no issue as you most like get back only VAT before your credit card bill is due.
- 20% more expense means 20% more cash back on your card.
- For all EU, with the exception of Ireland, you won't be charged VAT as it is an intra-community supply.
Apart from that I have reasonable doubt that OP is reclaiming VAT.
Yes, except that it does not make sense tax wise as most likely you won't be able to claim business expenses.
I already wrote that week's ago, US HK CH wood all do the job. But it is not necessary. He can just use same company and put HK as country in the address.
I stand by my point, OP is either trying to quirk the system or did not understand VAT.
for everyone questioning VAT on selling products and impacting your business, read what @daniels27 just wrote!
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If money is your hope for independence you will never have it. The only real security that a man will have in this world is a reserve of knowledge, experience, and ability!
My personal favorite thread posted in the Mentor Group. Group of investment companies to avoid licensing.
so many guys don't understand how online business with advertising works.
If you find a good product you can go from 100k to 1M€ ad spend within one month.
and if you have to pay 20% on top of your ad spend, this fucks your cashflow.
eVeN iF YoU cAn ClaIM iT bAcK LaTEr stupi#21
If you find a good product you can go from 100k to 1M€ ad spend within one month.
and if you have to pay 20% on top of your ad spend, this fucks your cashflow.
eVeN iF YoU cAn ClaIM iT bAcK LaTEr stupi#21
What about creating a company that solves this problem for multiple clients worldwide asking for a small commission of the total ad spend?
Does it makes sense?
No. See my post above. There is no such problem.
Also, if you open a Hong Kong company do buy ads for a UK company. Indeed Google won't change you VAT. However, you have to charge you UK client VAT.
Last edited: Sep 23, 2024
But no business pays VAT you get it back... even if you pay 250,000 EUR in VAT you get it back!
Actually no.
First of all, in most cases, VAT helps your cashflow as you collect from your customers more than you pay to suppliers. You get up to 3 months of cashflow from government.
And then for the very rare case that you only sell VAT/GST/sales tax free (which is very, very unlikely for amounts where the VAT on ad spend would matter), you can apply for monthly invoicing with Google and many other advertisers.
actually OP asked specifically about VAT on ADs.
You can apply for monthly invoicing with many other advertisers... uh huh... you need a long history with them and with meta it's a complete gamble.
you clearly don't run any international business with paid ads so i don't understand why you give advice on that topic.
Honestly, you are wrong. Google does it fairly quickly and apart from that they all take credit cards. 1M ad turnover per year is 30k cashback for a lack of cashflow of about 20k. It really does not make sense to talk about the cashflow issue. Having at least 3M of sales, the delayed payout from Amazon etc. are tenfold.
And if you really need to solve the chashflow issue, you can still opt to open a HK company, charge all ads through them and then invoice your own company. Just beware that you need to register your HK company for VAT and charge VAT to your own company. But you can claim it back with less delay.
Let me explain. There are only a few EUR countries with 20% VAT, none of them being Ireland.
Now, you know what? Google, Meta, Amazon... You know what? They do not charge VAT! There is no cash flow issue. Have you ever checked your invoices? All without VAT and a note to reverse charge. It is you tax office that you pay the VAT to and they give it back to you at the same time!
Last edited: Sep 24, 2024
@jorge have you read my previous messages? There is no such problem. It is just a matter of a couple of forms to get it back. And for the biggest part of the problem, it is EU where ad spend it zero rated as it is invoiced from Ireland. Apart from that, yes you could create such a company for the case of EU and incorporate like in Estonia and then invoice the Irish companies that still have to pay VAT to Meta and Google. But I wonder who would use such service when you can just use your credit card for ad billing and then get the VAT back before you even pay a cent.
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