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

I was having the same problem. Here in Italy they are fucking us badly with taxes etc, I guess you must have a well known contact in foreign country for this.
 


If you're not the OP don't PM me. I don't have time (or the interest, or the expertise) to solve everyone's fucking tax problems.
 
I was doing some research recently into this, you can do better than 10% corp tax. Look into the individual tax treaties with your country though, assuming you're not looking to evade, you want somewhere that has treaties so there's no double taxation. Remember also, that (according to my accountant) you still have to pay your country's corporation tax if you're based offshore. So in the case of Ireland, here you'd have to pay 32.5% corp tax.

Seychelles is one place that has 0% corp tax, I believe. (although they're a bit fledgling, so don't have all the tax treaties set up yet)
 
51monty said:
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...
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The real error should be the "non-legal way", trust me it could be very bad for all your earnings.
Follow, as said above, the Ireland and Cyprus way as I have done.
You won't turn back anymore.
 
I had same issue. My band reports how much money I receive to "IRS". So I got debit card,and screw them. Now there's always legal way to get this done. Some people wont even know what Paypal is,so dont bother,just say creating web sites for foreign companies. Find a smart accountant in your country,he will tell you how to solve all this. Bank is not the place to go :)
 
absolute said:
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!
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This is some interesting info. Definitely got my brain ticking.
I was under the impression that you need a director physically in the location of the business though but perhaps this isn't true...
 
Hi guys,

Thanks for the responses. I'd like to add a few clarifications and some extra info (at least the way I understand it).

1) Yes, Paypal was only reporting to the US IRS until recently. But from now on they will be reporting to "EU IRSs" as well, if the total amount in incoming payments per year exceeds $20,000.

2) Paypal tracks IP addresses, and as far as I can tell, they don't like seeing a Paypal account being accessed from a different country. For example, if I become incorporated in Delaware or Cyprus, how would I access my Paypal account? Via VPN? I don't want to try and "trick" anyone. I just want to do this in as a clean and legitimate way as possible (a smart way though).

3) Very soon, all the "federal authorities" will be interconnected, including all banks. Banks will be required to provide data on any deposits and withdrawals. If someone checks, it will be clear that I have some source of income.

4)
Make sure that the payments to yourself are for consulting or continued work on the software
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I have received this advice in the past (and it does sound good). But, since I'm selling copies of software and there are several transactions a day, won't that look "unnatural"? Shouldn't I somehow be sending the "local IRS" some type of "VAT payment" for every single transaction, every few months?

5) I don't want to move to another country.

6) Guerilla, thanks for your kind offer. I'll send you a PM, once I receive some more replies and become "less retarded." I don't want to waste your time with dump questions - I know you are super busy (love your posts on the board btw).

Thanks again...
 
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