Yes, you are correct. Greece will tax your Estonian-registered company as a Greek company since you manage the company from Greece.
Best setup for a royalty income company
- Thread starter megaverseman
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Yes, that is basic math, what are you trying to say? The tax is 20%, it's not 25%.
You complaining about that sounds like you're complaining that France officially states its VAT rate is 20%, but when you buy something for €120, the included VAT is €20/€120=16.67%.
The confusion with Estonia is simply due to the fact that the tax payment is deferred. They cannot say that the tax is 25%, since it's not a withholding tax.
And as others have pointed out, it's like saying you earn a salary of €10k and you pay €4500 tax, so you receive a net salary of €5500.︀ Then the tax rate is 45% and not 81%. It doesn't make sense to calculate︁ the tax in relation to a net amount.
You complaining about that sounds like you're complaining that France officially states its VAT rate is 20%, but when you buy something for €120, the included VAT is €20/€120=16.67%.
The confusion with Estonia is simply due to the fact that the tax payment is deferred. They cannot say that the tax is 25%, since it's not a withholding tax.
And as others have pointed out, it's like saying you earn a salary of €10k and you pay €4500 tax, so you receive a net salary of €5500.︀ Then the tax rate is 45% and not 81%. It doesn't make sense to calculate︁ the tax in relation to a net amount.
Not sure what withholding tax has to do with this and why you keep bringing it up?
I am just giving you the figures. When you pay dividend of 1200 into your personal account. You pay tax of 300 from your company account to the Estonia tax office. Thats a 25% loss but you can call it 20% if it makes you happy.
I am just giving you the figures. When you pay dividend of 1200 into your personal account. You pay tax of 300 from your company account to the Estonia tax office. Thats a 25% loss but you can call it 20% if it makes you happy.
Because withholding tax would be subtracted from the dividends you pay out.
You're just mixing up things. When you pay out 1200 in dividends, you receive 1200 in dividends. No tax is paid on the dividends. What is really happening is you pay out 1500, and out of those, 300 (20%) is paid as tax and the net amount of 1200 is paid out.
To put it differently, imagine that the 20% tax were automatically deducted, as soon as money is deposited into the business bank account:
€1500 goes in, €300 tax is paid immediately by the bank. Half a year later, you pay out︀ the remaining €1200. Would you still claim that you had paid 25% in taxes?
I doubt you would, but that's where the confusion comes from.
You're just mixing up things. When you pay out 1200 in dividends, you receive 1200 in dividends. No tax is paid on the dividends. What is really happening is you pay out 1500, and out of those, 300 (20%) is paid as tax and the net amount of 1200 is paid out.
To put it differently, imagine that the 20% tax were automatically deducted, as soon as money is deposited into the business bank account:
€1500 goes in, €300 tax is paid immediately by the bank. Half a year later, you pay out︀ the remaining €1200. Would you still claim that you had paid 25% in taxes?
I doubt you would, but that's where the confusion comes from.
Withholding tax is always determined by your DTA. Estonia has no withholding tax on dividends itself btw.
Thats what I said...lol.
Bottom line just look at the balances. Your losing 25% of what you pay yourself in dividends. So as I said if you pay out 1200 to yourself you pay 300 from the company account to taxman. That's how it works. How you want to look at that is up to you 😀.
Thats what I said...lol.
Bottom line just look at the balances. Your losing 25% of what you pay yourself in dividends. So as I said if you pay out 1200 to yourself you pay 300 from the company account to taxman. That's how it works. How you want to look at that is up to you 😀.
you don't always want to blind trust what is posted public. Information found here can be a guideline or a clue to where to look.
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