How can I deal strategically with profit distributions from my foreign company?
In one of our previous articles, we already presented our "MORE-STUFF PLAN" for a possible relocation of the center of life abroad. The attentive and well-prepared online marketer, consultant and founder was provided with a comprehensive checklist.
These serve as a tool for clarifying complex questions in the context of international tax law. Furthermore, questions for clarification were identified that are at the heart of life.
We have already pointed out important aspects to the prudent and well-advised online marketer, consultant or founder who is considering moving the center of his or her life abroad permanently.
We consider a NON-double taxation clarification of facts:
A foreign company that is classified under the CFC rules is subject to add-back taxation in the country of residence of the shareholder of this company.
As already explained, the profits of the foreign company are subject to income tax in the shareholder's country of residence for shareholders who are natural persons.
Strategically, the question arises as to how I can deal with the withdrawal or appropriation of profits from my foreign company.
Is it an EU company or not? Is there a double taxation agreement with your country of residence or not?
The differences:
1. EU facts ✔️
2. DBA facts ✔️
3. non-DBA facts ✔️
The following should be taken into account when withdrawing or collecting profits from non-double taxation treaty aspects:
? Avoid personal cash flows to your country of residence.
? As a legal entity, your foreign company can acquire assets (movable or immovable) worldwide.
? Pay conveniently with your company credit card. This is a booking transaction "Company bank to company cash register". This is not an inflow to you as a natural person.
? Work with a settlement company. This way, the profit distribution can be paid out to you as a natural person.
? You move your center of life to a "low-tax country" at the time of the intended profit distribution:
? Switzerland or Malta is an option. The profit distribution is made to a natural person. This is followed by income taxation in the low-tax country or so-called "zero taxation".
? If you change your tax residence to Germany again, your income will not be taxed again. This results in a ban on double taxation.
The constant change in legal matters makes it necessary to exclude liability.
With a view to the moderate expense of use of our business addresses on 5 continentswe address entrepreneurs on their way to global entrepreneurship. We create clarity through positioning.
P.S. It follows: "A conclusion on strategic profit distributions by a foreign company."
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