Help regarding company structure

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Hi,

I've been having an offshore company since 2015, receiving money from clients for digital services, such as marketing and development.
In the beginning I was ignorant and not aware of the tax laws etc. Im a software developer, so i thought it would be an easy way to skip all the boring bookkeeping. I've now realized that I would have to had paid taxes for the income in my resident country.
I have recently formed a new company, with nominee direction, in Malta, which has a double tax rule with my country, and accounting every year, so this should be more right.

But I am now a little bit confused about what I should actually do, regards paying taxes, and the money I have in my account for the old company.

The bank I have been using is Euro Pacific Bank. Should I just hope that Euro Pacific Bank does not suddenly have to report my income to my resident country?
If EPB has to report, how many years will it have to report back?
What is the best option to get the money from EPB to my personal account, and pay the taxes?

I am thinking to form an account for my Malta country with LeuPay, then invoice my offshore company for the remaining funds on the EPB account, then transfer, and pay tax. Would this work / be legal?

I hope someone can help.

 

[Martin Everson]

Humm....why did you form a Malta company? Secondly do you have a Malta bank account? Malta companies have high tax. You only benefit from the effective 5% tax rate if it has foreign ownership and to get the tax rebate you must have a Malta bank (IBAN) account not a foreign bank account. Leupay since it left Malta does not offer Malta bank account IBAN's but Bulgarian ones :-( Leupay is useless for Malta based companies now to benefit from full imputation tax. You would need to open with Satabank unless you don't care about the full imputation tax and are happy with 35% corporate tax rate.

EPB won't report automatically at this stage but with US about to be blacklisted by EU anything could happen. EPB is also a big target for tax authorities as it moved from St Vincent to Puerto Rico and promotes on its website that is does not report. This is a red rag to a bull. If they had to report then expect them to have to report at least the last calendar year but this is slim. You may want to consider a tax amnesty if it is available in your country. The worst that could happen is years from now the U.S strikes some agreement to handover EU account holders going back X years - very slim chance though with Trump anti-EU stance but you never know what he could agree...lol. He is a business man after all.

In terms of moving the money from old company account at EPB to new company you could apply for a capital increase in the Malta company and transfer the money from EPB to Malta company as its capital. The issue is at this stage is you will not be able to sleep at night. If anything happens to EPB they can trace funds to your new company. In fact all wires can be traced from EPB's SWIFT BIC.

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Please note my posts should not be taken as financial or tax advice. Please seek professional advice in that respect.

 

[JohnLocke]

Martin Everson said:
EPB to new company you could apply for a capital increase in the Malta company and transfer the money from EPB to Malta
Click to expand...

but this would not let OP avoid to pay tax from the money IF his home country will know about the money or ?

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At the moment i think the safest bet is just to declare the income and pay the taxes. Hopefully it will not have consequences to declare income so late. What do you guys know about that?