3 ms·

It’s not “where you live” but where the company operates. I happen to (indirectly) co-own a UK ltd. It does business in the UK and has UK resident employees. It

It’s not “where you live” but where the company operates. I happen to (indirectly) co-own a UK ltd. It does business in the UK and has UK resident employees. It pays taxes in the UK only. But if that Ltd. would operate in Germany from a German office and have German resident employees, it would likely be classified as German tax subject.

ramtatatam 4y ago
I was considering to incorporate in UK (not for tax reasons but for transparency of their laws compared with the place where I live). My accountant told me that recently there had been laws introduced making it basically impossible to become significant shareholder unless you relocate. I have not confirmed this myself as I'm yet to review regulations.
- Xylakant 4y ago
  We have formed our Ltd in the UK pretty much exactly one year ago and it wasn’t a problem for us - however, the Ltd is a subsidiary of our German company, so I’m not a direct shareholder. This may or may not change things.
ChuckNorris89 4y ago
It depends how you extract the company profits (as salary? as dividends? do you reinvest them? etc.), and where you move them after you've taken them out. If you live in Germany but operate a UK company and all those profits never leave the UK, then you'll pay no German tax on those gains. But if you were to take those profits from the UK to use in Germany, then the German gov will want a sizable piece of your foreign gains.
- konha 4y ago
  > If you live in Germany but operate a UK company and all those profits never leave the UK, then you'll pay no German tax on those gains. From my limited understanding this is wrong and you should consult a tax advisor before attempting do set this up. “Ort der Geschäftsleitung” (smth. like “location where business decisions are made”) seems do be a recurring topic when it comes to taxation of foreign companies in Germany. They might argue you are “unbeschränkt steuerpflichtig” in Germany. (You owe taxes just like if your company was registered there.)
  - Xylakant 4y ago
    Yup, that’s what I took from discussing this with our tax accountants. The reason our UK ltd is taxed in the UK is that it does it’s business in the UK and our German business is served from the German GmbH which owns the UK ltd.

ramtatatam 4y ago

I was considering to incorporate in UK (not for tax reasons but for transparency of their laws compared with the place where I live). My accountant told me that recently there had been laws introduced making it basically impossible to become significant shareholder unless you relocate. I have not confirmed this myself as I'm yet to review regulations.

Xylakant 4y ago
We have formed our Ltd in the UK pretty much exactly one year ago and it wasn’t a problem for us - however, the Ltd is a subsidiary of our German company, so I’m not a direct shareholder. This may or may not change things.

ChuckNorris89 4y ago

It depends how you extract the company profits (as salary? as dividends? do you reinvest them? etc.), and where you move them after you've taken them out. If you live in Germany but operate a UK company and all those profits never leave the UK, then you'll pay no German tax on those gains. But if you were to take those profits from the UK to use in Germany, then the German gov will want a sizable piece of your foreign gains.

konha 4y ago
> If you live in Germany but operate a UK company and all those profits never leave the UK, then you'll pay no German tax on those gains. From my limited understanding this is wrong and you should consult a tax advisor before attempting do set this up. “Ort der Geschäftsleitung” (smth. like “location where business decisions are made”) seems do be a recurring topic when it comes to taxation of foreign companies in Germany. They might argue you are “unbeschränkt steuerpflichtig” in Germany. (You owe taxes just like if your company was registered there.)
- Xylakant 4y ago
  Yup, that’s what I took from discussing this with our tax accountants. The reason our UK ltd is taxed in the UK is that it does it’s business in the UK and our German business is served from the German GmbH which owns the UK ltd.