Got the Estonian e-residency approved

[professor]

@isaiah122 If income is from EU / EEA you might be subject to VAT and better to consult about it. Im receiving income through deel too, but from US and it is exempt from VAT.

Dividents are to you as sole owner of company. It is just more tax effective as you can pay yourself minimal salary and insurance payment will be from that minimal salary.

Basically with ЕООД you’ll pay 14,5% (you can deduct expenses)+ around 130€ in insurance per month

With self insured you’ll pay 7.5%(can’t deduct) + 480€ insurance

Not a tax advice. Please consult professionals before making decisions

 

[isaiah122]

@professor I will be completely honest with you because I have no clue about this stuff. If I pay myself a minimal salary what happens with the rest of the money? Does it remains as a company profit? What happens if I need it at some point?

 

[professor]

@isaiah122 It remains as profit and from it you pay dividend to yourself.

Basically salary and dividends are two ways of getting money out of company

Nice article about freelance taxes in Bulgaria https://dmitryfrank.com/articles/bulgaria_freelance_taxes

 

[isaiah122]

@professor Thanks for explaining!

 

[isaiah122]

@professor Whoa, that article was very good. I didn't know about the individual option. That's sort of like the autónomo in Spain but much better. 15% would be good enough for me to just get my fiscal responsibility taken care of and have peace of mind.

Thanks a lot for sharing that!

 

[ca1987]

@professor

One nice thing. In Bulgaria investment in EU securities ( for example ETFs) are exempt from capital gains tax.

Sounds interesting. Can you provide the source? Might be in Bulgarian, I know Russian so the reading part shouldn't be a problem for me.

 

[1shae123]

@ca1987 Not only this, if a Bulgarian company is investing in stocks on "еквивалентни регулирани пазари" (i.e. US exchanges are the most notable example) your company is not taxed on the capital gains, but capital losses are not reducing your taxes either. I suppose this is valid for other EU companies, not sure.

(The keyphrase is in the quotes. In English it's "equivalent to a regulated markets" I think.)

The important part is not the securities being EU, the important part is the market where they are traded - "regulated markets" or "equivalent to a regulated markets". If the shares are traded outside these markets the tax exception is not valid.

 

[professor]

@1shae123 AFAIK еквивалентни регулярни пазари is exempt only for corporate, but not for natural persons. Can you please give a source?

 

[1shae123]

@professor

еквивалентни регулярни пазари

It's "еквивалентни регулирани пазари".

Personal income laws: https://www.lex.bg/laws/ldoc/2135538631

There is no mention of еквивалентни регулирани пазари.

Corporate taxation law: https://www.lex.bg/laws/ldoc/2135540562

д) (нова - ДВ, бр. 104 от 2020 г., в сила от 01.01.2021 г.) с акции, извършени на пазар на трета държава, който се счита за еквивалентен на регулиран пазар и за който Европейската комисия е приела решение относно еквивалентността на правната и надзорната уредба на третата държава в съответствие с Директива 2014/65/ЕС на Европейския парламент и на Съвета от 15 май 2014 г. относно пазарите на финансови инструменти и за изменение на Директива 2002/92/ЕО и на Директива 2011/61/ЕС (ОВ, L 173/349 от 12 юни 2014 г.).

The phrase "еквивалентен на регулиран пазар" is basically the same (singular form).

 

[professor]

@ca1987 Here is official tax office website https://nra.bg/wps/portal/nra/taxes/godishen-danak-varhu-dohdite/prodazhba-na-imushtestvo
Main conditions are that asset is priced in EU currency (euro, levo) and traided on EU exchange

 

[rbroyal]

@isaiah122 I am from Kosovo (Balkans), and I’m a business owner here. Tax on profit is 10% overall. Tax on foreigners doing business is only 5% of the salary you get and the 10% on profit.

If you profit 10,000 annually you pay 1,000€ in taxes and 5% monthly on your salary and you are all cleared out.

You can easily open a business as a foreigner and is worth visiting.

Taxes are very low, labour in tons with fluent English, German and Albanian Languages, median age is 29 years old, roughly 1.5 million in population. A very good country for Outsourcing Visionaries.

I’m in the BPO industry. If you think of visiting here or need any help you can reach me at my e-mail, I live in the capital city Prishtina.

batushablondin@gmail.com

 

[isaiah122]

@rbroyal What about if I already have a company set up elsewhere but want to pay taxes there? I assume I would have to rent a property, get some kind of residency?

 

[rbroyal]

@isaiah122 Residency for sure, but that is a fairly easy thing to get here. Living place would be required if you were to get the residency.

I don't know how what you're asking would really work or even if it is possible at all. I don't know anyone who is doing it this way.

The thing is that we do not pay taxes personally like they do in the US for example, the annual tax filing and all that. When you have a salary from a local company, they will deduct the taxes from your salary and automatically pay.

But, for you to pay taxes as a business owner your business must be registered in Kosovo and therefore have a tax ID.

 

[ian16]

@isaiah122 As far as I know, the only tax free way to get something out of Estonian companies is to reinvest. Anything you're spending on the company is tax free. Some are very liberal with this, paying for "home offices" that are actually homes and other such creative bookkeeping. If you're too creative you may get in trouble with the tax people.

 

[isaiah122]

@ian16 I've been told by xolo.io (the company that takes care of the legal work for you) that you can pay yourself as a salary and that way you pay no corporate tax in Estonia. I was told the same by the guy living in Brazil. Apparently as far as I understand it, you only pay corporate tax in Estonia if you pay dividends.

 

[matheww1]

@isaiah122 But you can also pay yourself in Spain and that money won't be subject to corporate tax either. It's an expense. But you're still liable for personal tax on your income.

 

[isaiah122]

@matheww1 In Spain I need to pay the autonomo monthly fee and the IRPF. I don't pay VAT because my income doesn't come from Spain. However I don't want to live in Spain anymore regardless of the taxes. I want to live half of the year in Eastern Europe and the other half in South East Asia. That's why I'm considering the Estonian company option, because it doesn't require you to reside in Estonia. I would like to pay taxes where I spend the majority of the year at. That's what I'm aiming for, not paying zero tax.

 

[matheww1]

@isaiah122 I see. Why eastern Europe? Cold countries.

 

[isaiah122]

@matheww1 I want to go to south east Asia during Europe's winter and come back in the summer. Weather is fine in eastern Europe during the summer (was in Croatia in September and it was even too hot). However prices and cost of living are very attractive. Also very safe and kind people.

 

[katehuston55]

@isaiah122 Cost of living in Croatia gets worse each day, would not recommend. Prices of groceries are higher than in Germany for an example.