The cross boarder what "modernised" structure in Europe sucks and makes it a complete different way to do business online.
E-Commerce company structure for minimal tax
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It is like sales tax in the US. You busy charge it to the customer and good. Everybody selling there pays is, so why bother?
Yes, but let's be honest let them charge their residents sales tax and VAT. They are all mature people that can leave it they do not want to pay. It course they don't. But not because they are lazy but because they like the subsidies︀ that their VAT pays for.
OSS is good, you only register once and pay once.︁ Much less overhead than having to register in all countries.
Of course not paying would︂ be most interesting but I guess this isn't an option anyway. They want it, they︃ pay it, we collect it for them.
Yes, but let's be honest let them charge their residents sales tax and VAT. They are all mature people that can leave it they do not want to pay. It course they don't. But not because they are lazy but because they like the subsidies︀ that their VAT pays for.
OSS is good, you only register once and pay once.︁ Much less overhead than having to register in all countries.
Of course not paying would︂ be most interesting but I guess this isn't an option anyway. They want it, they︃ pay it, we collect it for them.
I get that it’s comparable to the U.S. sales tax. It’s more a big pain in the a*s as it limits a lot of people on their entrepreneurial starts as it adds more complexity for them.
If you are a seasoned e-commerce entrepreneur then it’s just a nuisance which changes the conversation after implementation into price optimization to maximize profits.
If you are a seasoned e-commerce entrepreneur then it’s just a nuisance which changes the conversation after implementation into price optimization to maximize profits.
Yes. I totally agree. It is a nuisance. But mainly in terms of adminstration rather than having to collect taxes for the consumers. A global OSS with streamlined rates and exemptions and a reverse charge regime for companies would eliminate︀ most if the nuisance.
Yes. Will definitely cost you $1200 per year if you find have a local director. I really cannot recommend to do it for fun. You can easily live a couple of months of that money in Armenia.
https://swiftly.sg/#pricing
https://swiftly.sg/#pricing
You're absolutely right, it feels like it’s becoming harder and harder to manage all the paperwork and accounting involved in running a small business. It’s overwhelming how much they burden small business owners.
To avoid paying profit tax you can set up a Chinese and Hong Kong corporation.
Use the Chinese company to register and sell on e-commerce platforms, receive the funds on a payoneer account. Prepare a contract between the HK and Chinese company where it states the Chinese company acts as an agent. Dont report or transfer any of the income on payoneer in China, only some salary can transfer to personal Chinese bank account by payoneer. Transfer remaining income to the HK company registered as offshore company (0% tax) and use this account to pay suppliers and take out remaining as dividend at 0%.
Ofcourse this set up only works if you live in a country where they dont care︀ about this set up or that is not part of CRS. If you live in︁ EU forget about it as the money you will save you will pay 10fold back︂ + legal fees.
Use the Chinese company to register and sell on e-commerce platforms, receive the funds on a payoneer account. Prepare a contract between the HK and Chinese company where it states the Chinese company acts as an agent. Dont report or transfer any of the income on payoneer in China, only some salary can transfer to personal Chinese bank account by payoneer. Transfer remaining income to the HK company registered as offshore company (0% tax) and use this account to pay suppliers and take out remaining as dividend at 0%.
Ofcourse this set up only works if you live in a country where they dont care︀ about this set up or that is not part of CRS. If you live in︁ EU forget about it as the money you will save you will pay 10fold back︂ + legal fees.
I think it was around 2010-11-12 when I made a comment to a friend about the administrative burden. Back then I said that we would end up having 1 fulltime employee on compliance, i.e. dealing with banks, registrar, surveys (some are obligatory) and all the other s**t thrown at entrepreneurs. The other day I spoke to a medium sized company owner and he said that he hired︀ such an employee last month.
Add the tax complexities to it and it gets even︁ worse..
Add the tax complexities to it and it gets even︁ worse..
Insane, It seems very illogical to make it so difficult to run a business, but I guess that's how China operates.
Not much surprises me when it comes to China and running a business. It seems to me that they deliberately make it so complicated to keep an option open for penalizing people, imposing fines, or even seizing their business if it becomes too profitable.
Oh, that does remind me a bit of what is happening in the EU these days and what we might expect in the next 5 to 10 years.
Oh, that does remind me a bit of what is happening in the EU these days and what we might expect in the next 5 to 10 years.
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