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.
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.
In strategy consulting, 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 clarification of facts
2. clarification of DBA facts
3. non-DBA clarification of facts
1. details on EU fact-finding:
The following should be observed when withdrawing or collecting profits:
? Dividends are paid out in the country of residence. This results in 25% withholding tax in Germany.
? A gross employment contract is concluded via the company. Taxes and social security are paid in the country of residence.
? You withdraw money with the credit card of the foreign company. The booking process is company bank to company cash desk.
? A German representative office can claim expenses from the parent company.
? The Money Laundering Act applies from 10,000 euros. If you bring 9,000 euros from the company's country of domicile, no control notification will be sent to the tax office.
? You can obtain a loan from the company on the same terms as third parties.
? You can set up a second company, then a limited company with a permanent establishment in the country of residence, which then has a share in the foreign company.
? The relocation of the center of life to a "low-tax country" at the time of the intended profit distribution.
? If you own a company in your country of residence, it can take a stake in the foreign company. The company's profits then flow into your country of residence without having to pay withholding tax.
? Please observe the "mother-daughter guidelines".
The constant change in legal matters makes it necessary to exclude liability.
If a foreign EU company is founded, we will inform every entrepreneur of the requirements for "building up substance" as part of the structuring consultation without being asked.
We make it clear that many competitors completely neglect the issue of "building up substance" in the context of international tax law.
In view of the moderate effort required to use our business addresses on 5 continentswe address entrepreneurs on their way to global entrepreneurship. We create clarity through positioning.
How to set up a successful international company and do everything right from a multicultural perspective?
? How my team and I support your journey as a global entrepreneur?
➕ Location consulting
- Recording and analysis of the current situation
- Positioning your company
- Optimization of the company website
➕ NEW-WORK workshops and training courses
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