Why risk offshore? Just pay some taxes
- Thread starter jenhuang30
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It would depend on you not becoming tax resident in another country accidentally or carelessly ... if you spend all year in France they will tax you no matter what that Panama Fiscal Residence Permit says.
Well honestly I think VAT is one of the more "fairer" taxes, or at least it is somehow honest. You consume, so part of that consumption goes to state and you pay indirectly. It is also politically must feasible to implement and then to make it higher, and higher.
Excise taxes are also politically easy to deal with - just tax people who smoke, drink alcohol or sugary drinks. I am strongly against the fact that the state should tell me how I'm supposed to destroy my body. It is somehow absurd, why the state allows me to drink vodka and smoke tobacco︀ but smoking weed and using cocaine is forbidden? I want to be allowed to ruin︁ my body in whatever way I wish.
I think the most unfair taxes are property taxes and property transfer taxes. You own a house? Pay 2% per year just︂ due to the fact that you own it! You want to transfer the house to︃ someone? Pay 4% just because this transfer is recorded in some retarded government registry or︄ database!
Income taxes also aren't very fair, especially for common employees who cannot defend themselves︅ and are forced to pay income tax+social insurance+health insurance. In some countries such as France︆ this causes so much trouble that companies find it difficult just to compete or even︇ to fire someone. I think in the future with more decentralization and more P2P economy,︈ this tax will be more and more difficult to enforce.
Unfortunately, that means that states︉ will have to heighten the first three mentioned categories (VAT, excise and property tax). The︊ only way out of this is just move - vote with your feet. Or maybe︋ start using crypto and wait until all this collapses in the next recession, I won't︌ be surprised if countries like France, Italy or Belgium will have a fucked up next︍ 20-30 years.
Excise taxes are also politically easy to deal with - just tax people who smoke, drink alcohol or sugary drinks. I am strongly against the fact that the state should tell me how I'm supposed to destroy my body. It is somehow absurd, why the state allows me to drink vodka and smoke tobacco︀ but smoking weed and using cocaine is forbidden? I want to be allowed to ruin︁ my body in whatever way I wish.
I think the most unfair taxes are property taxes and property transfer taxes. You own a house? Pay 2% per year just︂ due to the fact that you own it! You want to transfer the house to︃ someone? Pay 4% just because this transfer is recorded in some retarded government registry or︄ database!
Income taxes also aren't very fair, especially for common employees who cannot defend themselves︅ and are forced to pay income tax+social insurance+health insurance. In some countries such as France︆ this causes so much trouble that companies find it difficult just to compete or even︇ to fire someone. I think in the future with more decentralization and more P2P economy,︈ this tax will be more and more difficult to enforce.
Unfortunately, that means that states︉ will have to heighten the first three mentioned categories (VAT, excise and property tax). The︊ only way out of this is just move - vote with your feet. Or maybe︋ start using crypto and wait until all this collapses in the next recession, I won't︌ be surprised if countries like France, Italy or Belgium will have a fucked up next︍ 20-30 years.
Now add inflation, social taxes, insurances and countless︎ more. Also my favourite is inflation. Do you think it is fair that central bank️ is printing the very money you earn with hard labor without any control whatsoever? They never ask your permission but you have to ask them for permission to be successful (in form of business license)? And then your taxman is taking what is left from you as commission for your success?
Nobody gives a s**t about you when you are poor (gov would also try to keep you there) but when you start making money, taxman is all there waiting and counting the possible revenue.
Nobody gives a s**t about you when you are poor (gov would also try to keep you there) but when you start making money, taxman is all there waiting and counting the possible revenue.
Hi im new to offshore setups, but why discuss this as if its all of nothing, you can have a local business and divert some income offshore, going full offshore is probably not practical.
Making sure you earn very little onshore may be viable ... but may also be risky.
Key aspect is that there is no one solution that fits everyone perfectly.
Key aspect is that there is no one solution that fits everyone perfectly.
I agree as I am in the same boat. My main concern is privacy and asset protection. I am still paying the same tax as everything is declared in my tax return. However, I am feeling safer that no ambulance chaser lawyer can trace my asset nor get any local jurisdiction order to reach my assets abroad.
Why risk offshore, just pay some taxes in Belgium!
Annual Salary: 1M (Hello big fat CEOs of big fat multinationals)
After tax income: 386K
Source:
Belgium Tax Calculator
Why not buy some nice Belgian chocolate to make those capitalist tears a little sweeter? Oh wait, there's VAT! Onononoooo.
Annual Salary: 1M (Hello big fat CEOs of big fat multinationals)
After tax income: 386K
Source:
Belgium Tax Calculator
Why not buy some nice Belgian chocolate to make those capitalist tears a little sweeter? Oh wait, there's VAT! Onononoooo.
If you love South Africa Botswana is quite a good alternative. Safe, relatively low taxes (income tax capped at 20%). South Africa a stones throw away (quite literally if you live on the river south of the capital).
However of those listed Mauritius would be my real go to....as you say SA isn't︀ very safe anymore...sadly.
However of those listed Mauritius would be my real go to....as you say SA isn't︀ very safe anymore...sadly.
I skimmed much of the thread but I have been recently reading more deeply on the topic of foreign controlled corporations aka controlled foreign company aka cfc.
I'm not sure your country of origin is, but without knowing the specific answer no one here can answer that question. Almost every country in the developed world has some version of cfc rules.
They basically are an anti-tax avoidance measure. The USA︀ is the most draconian, they tax earnings you have anywhere in the world, even in︁ a private corporation simply because you are American and treat capital gains as dividends in︂ that sense. Other nations like Australia and Brazil and I believe UK might do this︃ as well. They basically do not recognize your foreign corporation as a separate entity from︄ the owner (Citizen) UNDER ANY CONDITIONS if they own more than 50% of the "votes︅ or value" and that number is increasingly being lowered to 10% (thank you Donald Trump...︆ so much for Republicans cutting taxes eh).
Some people might think O well, I just︇ not tell the government on my tax forms that I have this account in Panama︈ so they won't know I'm earning this money. This is why they have pushed fatca︉ and crs so hard into every corner of the planet and automatic sharing agreements. They︊ will not only know that you have those accounts, they will also know that you︋ are lying too. And you will get hit with massive back taxes and fees. The︌ only real solutions is to up and leave these countries. They have become so hostile︍ and anti-business that you'd be better off giving up your citizenship there, visiting and ironically︎ using them as tax havens (Specifically the USA who doesn't share with outside countries and️ allows anonymous corps and doesn't even levy taxes on non-residents who earn nothing there).
The second set of CFC countries include Canada and countries like them. They technically have no formal rule calling it cfc, but what they do is they tax overseas income from citizen owned/controlled corporations not under any conditions but where it appears to be passive income. They basically have an active business/earnings test and a taxation test. Essentially, if you have what looks like a passive income that is being used to earn money through a subsidiary, they tax you at high rates. However, if you set up what looks like a legit business, you can bring home that earnings nearly tax free so long as︀ taxes are paid in a foreign jurisidiction who has a tax sharing agreeement with canada.︁ That is typically barbados who puts a 1-2.5% tax on these types of firms. So︂ one could earn like $4 million USD from a web business, setup in Barbados with︃ a manager and at least 5 employees to make it look legit (typically they like︄ 5 employees from my reading as a minimum) -don't worry min wage in barbados is︅ low- run your business from barbados as subsidiary, stay in Canada, and only pay like︆ 2.5% tax, without having to relocate on your $4 million. Not too bad, probably walk︇ away with $3.8 million vs paying Canadian tax man, 30-40%.
The third set of countries︈ have no cfc rules, but it includes almost no developed nations, you might find one︉ or two on there, but if it exist it would probably already be a place︊ with low taxes like HK or already a tax haven.
The benefit to relocating to︋ Panama would be if you are in set 1 nations you reduce your taxes by︌ exiting. If you are in set 2 nations you can effectively eliminate your tax rate︍ if you have enough money.
I'm not sure your country of origin is, but without knowing the specific answer no one here can answer that question. Almost every country in the developed world has some version of cfc rules.
They basically are an anti-tax avoidance measure. The USA︀ is the most draconian, they tax earnings you have anywhere in the world, even in︁ a private corporation simply because you are American and treat capital gains as dividends in︂ that sense. Other nations like Australia and Brazil and I believe UK might do this︃ as well. They basically do not recognize your foreign corporation as a separate entity from︄ the owner (Citizen) UNDER ANY CONDITIONS if they own more than 50% of the "votes︅ or value" and that number is increasingly being lowered to 10% (thank you Donald Trump...︆ so much for Republicans cutting taxes eh).
Some people might think O well, I just︇ not tell the government on my tax forms that I have this account in Panama︈ so they won't know I'm earning this money. This is why they have pushed fatca︉ and crs so hard into every corner of the planet and automatic sharing agreements. They︊ will not only know that you have those accounts, they will also know that you︋ are lying too. And you will get hit with massive back taxes and fees. The︌ only real solutions is to up and leave these countries. They have become so hostile︍ and anti-business that you'd be better off giving up your citizenship there, visiting and ironically︎ using them as tax havens (Specifically the USA who doesn't share with outside countries and️ allows anonymous corps and doesn't even levy taxes on non-residents who earn nothing there).
The second set of CFC countries include Canada and countries like them. They technically have no formal rule calling it cfc, but what they do is they tax overseas income from citizen owned/controlled corporations not under any conditions but where it appears to be passive income. They basically have an active business/earnings test and a taxation test. Essentially, if you have what looks like a passive income that is being used to earn money through a subsidiary, they tax you at high rates. However, if you set up what looks like a legit business, you can bring home that earnings nearly tax free so long as︀ taxes are paid in a foreign jurisidiction who has a tax sharing agreeement with canada.︁ That is typically barbados who puts a 1-2.5% tax on these types of firms. So︂ one could earn like $4 million USD from a web business, setup in Barbados with︃ a manager and at least 5 employees to make it look legit (typically they like︄ 5 employees from my reading as a minimum) -don't worry min wage in barbados is︅ low- run your business from barbados as subsidiary, stay in Canada, and only pay like︆ 2.5% tax, without having to relocate on your $4 million. Not too bad, probably walk︇ away with $3.8 million vs paying Canadian tax man, 30-40%.
The third set of countries︈ have no cfc rules, but it includes almost no developed nations, you might find one︉ or two on there, but if it exist it would probably already be a place︊ with low taxes like HK or already a tax haven.
The benefit to relocating to︋ Panama would be if you are in set 1 nations you reduce your taxes by︌ exiting. If you are in set 2 nations you can effectively eliminate your tax rate︍ if you have enough money.
Nothing is wrong with it for now. It has been under Democratic rule and historically very stable. The issue is the first president ruled, then his son, who is now no longer ruling is out. He seems to be commenting and trying to almost influence the party he use to head up despite his term being over and no longer allowed to run. There is some tension because they are the same party, and people look at the region and instability from all sides and think it would/could be very easy for Botswana to go the wrong way. Especially if a major︀ Western power who has been know to play games in Africa, arm rebels, and back︁ coups etc. like Britain, USA, France, decide they want the new leader out.
I believe︂ Botswana is going through a new transition but it will likely turn out ok. It︃ is a small nation with just a few million people, and didn't have large number︄ of euro settlers that caused problems and complications in places like Mozambique, Zimbabwe, South Africa,︅ Kenya, North/West Africa, Congo, Rwanda etc.
The new president Masisi is very focused on expanding︆ the economy. However the opposition party has just successfully challenged in court his hotly contested︇ recent election. Masisi is hated by the old president khama because he has been cleaning︈ up corruption (aka firing his cronies who were stealing money) and using the country money︉ to do the right things. He is doing things Khama claimed couldn't be done. So︊ I would wait to see the outcome of the next election, because Masisi won 51%︋ of the vote but Khama is involved behind the scenes with opposition partywho only have︌ 31% of seats. Khama has a military backgground. While Botswana has never had a coup,︍ there was evidence a wealth south african family was involved in trying to do one︎ recently and if one is going to happen Khama would be the one to do️ it. I would wait 2-3 years before investing there until Masisi has firm control of things, because Khama is not going down quietly.
PS. while Masisi is the reasonable pro business party/candidate, the leader of the opposition coalition is promising to triple min wage, 100,000 public sector jobs (in a country of 2 million) and to increase pensions and presumably taxes.
I believe︂ Botswana is going through a new transition but it will likely turn out ok. It︃ is a small nation with just a few million people, and didn't have large number︄ of euro settlers that caused problems and complications in places like Mozambique, Zimbabwe, South Africa,︅ Kenya, North/West Africa, Congo, Rwanda etc.
The new president Masisi is very focused on expanding︆ the economy. However the opposition party has just successfully challenged in court his hotly contested︇ recent election. Masisi is hated by the old president khama because he has been cleaning︈ up corruption (aka firing his cronies who were stealing money) and using the country money︉ to do the right things. He is doing things Khama claimed couldn't be done. So︊ I would wait to see the outcome of the next election, because Masisi won 51%︋ of the vote but Khama is involved behind the scenes with opposition partywho only have︌ 31% of seats. Khama has a military backgground. While Botswana has never had a coup,︍ there was evidence a wealth south african family was involved in trying to do one︎ recently and if one is going to happen Khama would be the one to do️ it. I would wait 2-3 years before investing there until Masisi has firm control of things, because Khama is not going down quietly.
PS. while Masisi is the reasonable pro business party/candidate, the leader of the opposition coalition is promising to triple min wage, 100,000 public sector jobs (in a country of 2 million) and to increase pensions and presumably taxes.
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