4 ms·
In Germany it might be easier to open a company remotely via Estonia
by whazor 3mo ago
In Germany it might be easier to open a company remotely via Estonia
- earcar 3mo agoThat way, AFAIK, the German government will determine that the "place of effective management" is Germany, and tax you also there. Double taxation is not better.
- moondowner 3mo agoDE & EE should have a double taxation agreement. https://www.fin.ee/en/double-taxation-agreements https://www.fin.ee/en/double-taxation-agreements
- ma2kx 3mo agoI would say that depends of the company's legal form. If you have an "AG" or "GmbH" you get double taxed anyway, one time the company and than again your salary. So if you have an Estonian equevilant of a GmbH/AG your company will get taxed by Estonia and your salary by Germany. The Estonian E-Residency Website at least confirms my assumption but in case of Germany I could be very well wrong of course... https://www.e-resident.gov.ee/understanding-cross-border-taxes/ https://www.e-resident.gov.ee/understanding-cross-border-tax...
- ExpertAdvisor01 3mo agoI think you misunderstood double taxation . You probably understood it as taxation on corporate and personal level. But in this context it means taxation in two jurisdiction (Estonia,Germany)
- b3orn 3mo agoYou don't get double taxed, you get taxed on your salary and your company gets taxed on whatever profit remains after paying salaries.
- notpushkin 3mo ago> So if you have an Estonian equevilant of a GmbH/AG your company will get taxed by Estonia and your salary by Germany Estonian CIT is 0%. If you pay dividends (which is not required), or if you pay director’s salary (optional if you’re a one-man company without a ton of admin), those will be taxed in Estonia. If you only pay yourself for your actual services – no taxes in Estonia. Germany might tax your Estonian company if they determine the company is a German resident. Check with your accountant. (IANAL)
- ExpertAdvisor01 3mo agoEstonia isn't 0% cit . Tax is just deferred until distribution.
- notpushkin 3mo agoTechnically yeah. But you don’t have to distribute profits, and paying yourself for your (non-admin) services is not taxed in Estonia. You might have to pay yourself a director’s salary. That would indeed be taxed at 22%, but you still only have to bill for the time you actually do admin / management work. So if you spend, say, 5 days a month on it and 15 days a month on everything else, the effective rate would work out to 5,5%. And for a single shareholder company with no employees and under 2M € annual revenue (and probably some other criteria like not having employees or veing liable for VAT or something) it is the general practice to just not pay the director’s salary at all. (This is probably a gross oversimplification, definitely ask a real accountant about the details.)
- noxvilleza 3mo agoHave multiple friends who have done an Estonian OÜ despite being primarily German. No issues on this tax side.
- ExpertAdvisor01 3mo agoIf they are still a German tax resident , they are committing tax evasion . § 1 Abs. 1 KStG
- noxvilleza 3mo agoWhat if there were multiple (2+) founders of a company, and some lived in Estonia? I think in one case they had a Croatian co-founder as well.
- ExpertAdvisor01 3mo agoThis will most likely result in Permanent establishment (PE) in Germany (e.g due to fixed place of business). That means Germany will tax the company anything which is attributable to the German guy.
- egorfine 3mo agoIt doesn't really matter. If you do business in Germany you are evading taxes just by the fact of doing business. Everything and anything you make belongs to the government. It is an unfortunate loophole in the law that temporarily permits you to steal some of your profit back from the government where it rightfully belongs. Yeah, this is sarcasm, but not really. The practical reality is that it simply makes no sense to incorporate in Germany. For example, the OP missed six months of opportunity just to please the bureaucracy and it's not even the end of it.
- ExpertAdvisor01 3mo agoIf you don't like the laws/rules then just leave Germany . There is no justification for tax evasion .
- ExpertAdvisor01 3mo agoThis is pretty bad advice as your company will be dual resident with Germany having the right to tax . That means you pay German taxes + double amount of compliance ( because you have to file everything in Germany+ Estonia ).
- dgellow 3mo agoNo, it’s generally a pretty terrible idea. Germany applies taxes based on the place where a company is managed. If you live in Germany and remotely manage your Estonian company then you’re expected to pay your corporate and other company taxes in Germany. The overhead of managing the international situation is more complicated than opening a company in Germany to be honest
- smallstepforman 3mo agoThis is insane. So I need to work 5 years on site in Germany as a contractor being paid by foreign parent company, why should the company be liable to be registered and pay taxes in germany. Eg Microsoft sends tech to fix Azure system fir Mercedes.
- dgellow 3mo agoI don’t understand your point. Are you managing the company from Germany? If you’re a contractor I don’t understand why you would be managing the company
- notanormalnerd 3mo agoYou should Google "Place of effective management" A lot of the entrepreneurs I meet become tax & social insurance fraudsters as soon as I mention this, because they think they can setup a company somewhere but live in Spain, without paying or registering companies here.
- ccozan 3mo agoyes because you are handling 100s of milions and you are some sort of public face then you get targeted. But if you are some noname making maybe up to a few mils per year income, nobody is going to chase you and prove you are avoiding local taxation. You are always "in a short holiday trip" :).