4 ms·

I am based in Germany and would be required to pay my taxes in Germany (?). Going with Stripe Atlas, would I have to pay additional tax in the US as well?

by nik736 9y ago

patio11 9y ago
Atlas incorporates companies in the U.S., and US companies will have a filing obligation for federal taxes and an obligation to pay Delaware franchise tax (which is basically a renewal fee for the company every year). Whether it is "additional" tax depends on your circumstances, and is a good question to run by an accountant. I've run US businesses from Japan for ~10 years or so. The net tax rate of doing is not obviously materially higher than just having a Japanese entity and doing everything through it; I'll avoid giving you the full blow-by-blow of why that is true, since it isn't relevant to your circumstances, but the short version is "foreign tax credits" and "social security totalization agreement " (a bilateral treaty).
- hultner 9y ago
  Do you know of anyone running an Atlas corporation in Sweden and how it works in conjunction with the Swedish tax system? I've been curious on the concept ever since I first read about it on your blog (which over all is a great read).
  - patio11 9y ago
    We have a variety of companies opened by folks operating in Sweden (and another 100+ countries besides). I would love to give you an answer regarding the Swedish tax system, but it is not one of the two tax systems that I know enough about to model well and, unfortunately, if it were, I would be legally enjoined from doing any sort of interpretation about how our product interacted with it. I recommend you talk to a local accountant.
lgbr 9y ago
No, Stripe forms a C Corporation which separates the company's income from your own (as opposed to an S Corporation or LLC), which will prevent Germany's Welteinkommenprinzip from having an effect on your German tax return.
- MarkCole 9y ago
  I believe that is correct. However as he is operating the company from Germany, he would be required to register the company as operating a branch (Zweigniederlassung) in Germany. The company would then be liable for German taxes on income generated from Germany. German Payroll taxes would also be required if they employ people within Germany. I am unsure if the Branch Office is also required to pay IHK fees but that may also be the case.
- abc03 9y ago
  Yes, it is separate. However, Ort der tatsächlichen Geschäftsleitung is Germany. That means you should pay taxes in Germany (if you do is another mattter, but if you don't and the Finanzamt finds out, you are in for a rough ride).
  - nik736 9y ago
    I think this is true. I would have to pay my taxes in Germany and make a "Zweigniederlassung".
Scarbutt 9y ago
Unless you really want a U.S company(maybe cause your target market is the U.S. and you plan moving there someday), does it really makes sense to use Atlas if you are based off in Germany? Germany being a Stripe supported country. Atlas makes more sense for people living in countries where Stripe is not supported but still want to use Stripe, the perk is, you have to pay high U.S. taxes that you won't enjoy and you will still have to pay German taxes from your U.S. income because you are a German citizen?
- arvidkahl 9y ago
  I run a SaaS business with almost all of the customers in the US from Germany, using a German stripe account. Credit card support is very limited, as any transaction will look like an international charge to the credit card vendor. This results in two situations that happen quite often: the card gets declined flat out (any kind of debit card, Discover, some AmEx) or the customer has to call their bank to allow for the charge. I had to build a customer support automation to help the customers understand that it’s not their problem. It is a bearable problem, but moving the accounts over to the US would reduce this friction, which happens at one of the most relevant times for retention.
  - technics256 9y ago
    Stripe Atlas solves this problem for you right, having a bank account with SVB? I'm an American, living in Germany, doing something very similar.
- csomar 9y ago
  No. It would make more sense to incorporate in SG or HK and then use Stripe since it supports both of these countries. The only reason why you want to incorporate a C Corp in the US is if you want to go big: Get investors, sell ownership (stock), IPO, etc...
  - Scarbutt 9y ago
    Can you open companies/bank accounts remotely in SG or HK?
chrisked 9y ago
Yes in your case you would be required to pay taxes in Germany with your entity. Why not incorporate a German entity? If you have any questions you can contact me any time on ck (at) firma.de. I’ve been running what stripe atlas is doing in Germany (firma.de) since 2012 and always love to chat.

I am based in Germany and would be required to pay my taxes in Germany (?). Going with Stripe Atlas, would I have to pay additional tax in the US as well?

by nik736 9y ago

I am based in Germany and would be required to pay my taxes in Germany (?). Going with Stripe Atlas, would I have to pay additional tax in the US as well?

patio11 9y ago

Atlas incorporates companies in the U.S., and US companies will have a filing obligation for federal taxes and an obligation to pay Delaware franchise tax (which is basically a renewal fee for the company every year). Whether it is "additional" tax depends on your circumstances, and is a good question to run by an accountant. I've run US businesses from Japan for ~10 years or so. The net tax rate of doing is not obviously materially higher than just having a Japanese entity and doing everything through it; I'll avoid giving you the full blow-by-blow of why that is true, since it isn't relevant to your circumstances, but the short version is "foreign tax credits" and "social security totalization agreement " (a bilateral treaty).

hultner 9y ago
Do you know of anyone running an Atlas corporation in Sweden and how it works in conjunction with the Swedish tax system? I've been curious on the concept ever since I first read about it on your blog (which over all is a great read).
- patio11 9y ago
  We have a variety of companies opened by folks operating in Sweden (and another 100+ countries besides). I would love to give you an answer regarding the Swedish tax system, but it is not one of the two tax systems that I know enough about to model well and, unfortunately, if it were, I would be legally enjoined from doing any sort of interpretation about how our product interacted with it. I recommend you talk to a local accountant.

lgbr 9y ago

No, Stripe forms a C Corporation which separates the company's income from your own (as opposed to an S Corporation or LLC), which will prevent Germany's Welteinkommenprinzip from having an effect on your German tax return.

MarkCole 9y ago
I believe that is correct. However as he is operating the company from Germany, he would be required to register the company as operating a branch (Zweigniederlassung) in Germany. The company would then be liable for German taxes on income generated from Germany. German Payroll taxes would also be required if they employ people within Germany. I am unsure if the Branch Office is also required to pay IHK fees but that may also be the case.
abc03 9y ago
Yes, it is separate. However, Ort der tatsächlichen Geschäftsleitung is Germany. That means you should pay taxes in Germany (if you do is another mattter, but if you don't and the Finanzamt finds out, you are in for a rough ride).
- nik736 9y ago
  I think this is true. I would have to pay my taxes in Germany and make a "Zweigniederlassung".

Scarbutt 9y ago

Unless you really want a U.S company(maybe cause your target market is the U.S. and you plan moving there someday), does it really makes sense to use Atlas if you are based off in Germany? Germany being a Stripe supported country. Atlas makes more sense for people living in countries where Stripe is not supported but still want to use Stripe, the perk is, you have to pay high U.S. taxes that you won't enjoy and you will still have to pay German taxes from your U.S. income because you are a German citizen?

arvidkahl 9y ago
I run a SaaS business with almost all of the customers in the US from Germany, using a German stripe account. Credit card support is very limited, as any transaction will look like an international charge to the credit card vendor. This results in two situations that happen quite often: the card gets declined flat out (any kind of debit card, Discover, some AmEx) or the customer has to call their bank to allow for the charge. I had to build a customer support automation to help the customers understand that it’s not their problem. It is a bearable problem, but moving the accounts over to the US would reduce this friction, which happens at one of the most relevant times for retention.
- technics256 9y ago
  Stripe Atlas solves this problem for you right, having a bank account with SVB? I'm an American, living in Germany, doing something very similar.
csomar 9y ago
No. It would make more sense to incorporate in SG or HK and then use Stripe since it supports both of these countries. The only reason why you want to incorporate a C Corp in the US is if you want to go big: Get investors, sell ownership (stock), IPO, etc...
- Scarbutt 9y ago
  Can you open companies/bank accounts remotely in SG or HK?

chrisked 9y ago

Yes in your case you would be required to pay taxes in Germany with your entity. Why not incorporate a German entity? If you have any questions you can contact me any time on ck (at) firma.de. I’ve been running what stripe atlas is doing in Germany (firma.de) since 2012 and always love to chat.