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Why would you ever want to distribute income? I mean, why not just reinvest it?
by def_true_false 6y ago
Why would you ever want to distribute income? I mean, why not just reinvest it?
- juskrey 6y agoEventually you'll have to buy food, and maybe, for some really lucky ones, have kids and house.
- def_true_false 6y agoCompanies buy delivery or dining for their employees all the time. Real estate could be owned by the company, same for cars. The feasibility of this probably differs a lot by country, depending on how anal the tax laws and authorities are.
- juskrey 6y agoThis really does not work anymore in most civilized countries, and most of the time they have explicit limits on that kind of stuff, unless you can REALLY justify that (hospitality industry etc).
- Andrew_nenakhov 6y agoYou can pay yourself a salary. This doesn't count as 'distributing income' and is taxed according to the laws of your residence location. That being said, if your salary will be more than 80% of corporate expenses, that might attract unwanted attention from tax service.
- PeterisP 6y agoIn general, paying out dividends would have a lower total tax rate than paying the same amount to yourself as salary.
- Andrew_nenakhov 6y agoTrue, but not everywhere. In my particular country it would be far lower due to some loopholes.