EU taxes, Paypal, and clueless "IRS." What to do?

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51monty

New member
Apr 30, 2011
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CLIFFS:

- I live in a European Union country

- Create instantly downloadable apps

- Get paid by Paypal

- I'm totally RETARDED about accounting and taxes

- Am not incorporated

- Local tax attorneys are clueless about internet marketing

- Local "IRS" is pretty much clueless too

- They say that I need to officially "start a business" (which is fine) BUT, every time a transaction is made, my "tax id number" as well as that of the buyer needs to be visible (no such thing visible in Paypal btw). Otherwise "we have a problem."

MY OPTIONS:

- Get a job that barely pays enough to survive on

- Keep doing this in a "non-legal way" and just deal with the consequences when they come

- Orr.... ???

If you have any feedback, I'd love to hear it. I really want to do everything in a legitimate way but I don't know how...

Thanks...
 


I'm having the same problem right now, so yeah any input would be appreciated.

edit: I actually started almost identical thread in my local IM forum the other day, but after browsing it for a while I realized that it's even worse than DP, lol, so no hope for getting an answer there.
 
If they're so retarded about internet marketing, why not incorporate? Likelihood is that they won't check, unless someone complains. Even if they do, I don't know anything about your country, but it'll probably only be a fine.

What about incorporating in another country? Make sure it's in one with double tax treaties so you don't pay tax twice.
 
If your making enough, fly to Hong Kong or Singapore open a corp and a bank account. PayPal allows you to deposit funds directly into accounts in either country.

Then setup a small monthly payment to yourself for living. Make sure that the payments to yourself are for consulting or continued work on the software. Make your position something that allows you to maximize write-offs from a home office.

The cost of this structure isn't very small but it's going to get you setup well for future.

Only problem you'll have is if one day you actually want to get large sums of money into the country you live to make a large purchase. However you can probably make the purchase through the company.
 
amateursurgeon said:
No need to do it in Hong Kong etc, just go to another EU country with a favourable tax regime. Less paperwork if you are already EU. Ireland is still very good for corporation tax.
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Yes! Ireland seems to be the place! And the 12.5% corp tax is just perfect.
 
Are you transferring the funds to a bank account in your home country?

AFAIK Paypal only reports (as of recently) to the IRS here in the land of the free/home of the brave. So, maybe you should just get a PayPal debit/mastercard thingy and use it as point of sale and at ATMs and be all rogue and shit.
 
I dunno Europe is fucking silly Google is being sued in France and lost for giving away maps for free.
 
kingofsp said:
Are you transferring the funds to a bank account in your home country?

AFAIK Paypal only reports (as of recently) to the IRS here in the land of the free/home of the brave. So, maybe you should just get a PayPal debit/mastercard thingy and use it as point of sale and at ATMs and be all rogue and shit.
Click to expand...

PP debitcard is for US only, there's Payoneer for that :) but no, I don't even want to avoid taxes, it's just that here noone knows what IM or e Commerce or whatever is and probably assumes that I'm laundering money or some other malicious shit..
 
amateursurgeon said:
No need to do it in Hong Kong etc, just go to another EU country with a favourable tax regime. Less paperwork if you are already EU. Ireland is still very good for corporation tax.
Click to expand...

Cyprus - 10% corp. taxes , no matter the profit and still in the EU - and the startup costs are higher (initially 4000-5000€ to get you setup with a bank acc, all the formal stuff etc. + 3000-4000€ yearly for accounting, virtual office space, lawyers etc.)

Or go completely offshore (Seychelles, Belize, Philippines) - will be hard to get a Paypal Acc. tho (but not impossible), as you are only allowed transactions to a debit card in those countries.
 
Set up a company as a non-resident owner in Delaware, Gibraltar or even a UK LLP. Consult a tax accountant in your home country.

Get a bank account in Cyprus or Malta or even Belize (depends on your payment processor obviously) and withdraw from that to your home/personal bank account. Declare that money at the end of the year as your income - either "positive income" or "foreign dividends" or whatever, depends on where/how your company is set up.

When you want to withdraw a shit load of cash legally - plan ahead of time. Establish residence somewhere that doesn't tax capital or dividends from abroad (like Malta where money held in a foreign account becomes capital after a year - ask a good accountant about this). Make sure that you aren't liable to pay any taxes in your home country that year - you need to leave in advance, sort out all paperwork, etc. Withdraw a fuckton of capital to your personal Maltese (example) account and it's all legal. Use it anywhere you like later on.

There are many other ways. If you're making good money - speak to a BIG 4 tax accountant and whatever you do get a letter from them saying that it's all good blah blah (ask for it).

Good luck!
 
- Keep doing this in a "non-legal way" and just deal with the consequences when they come
 
Open up a US corporation!

Really low corporate tax rate, almost no regulation, financially responsible government, sound and stable money supply, minimal risk of ever getting into lawsuits, and our leader doesn't propose new taxes every week.

Nothing better!
 
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