minimizing taxation - selling licence to my software online


1

My scenario is as follows:
I'm currently based in the European Union (Poland). For the last 2 years I have developed a software product, for which target customers are firms. I don't have a company registered. If I were to start selling my product, the way that makes tax office happy, it would look like this:

I register a company. Each month I pay 19% corporate tax from my income. But since I don't have any costs (not from the point of view of tax office) that 19% would be applied to all my sales. Additionally, I would have to pay each month over 200 Euro "social insurance" and initially would have to pay a tax consultant to make sure I do everything correctly. Add to that the small share of online payment provider.
I have some hard feelings about this, since I didn't exist to the government for the last 2 years, while woring on my product, without any income. But once I'm about to generate some profit... And don't even get me started on how will my tax money be spend by the government.

Anyway, an ignorant, like myself, would think that it would be enough to open a bank account in Switzerland (very lovely country, if I could afford it, I would move there permanently BTW) and tell the online payment provider to send the sales income there. But the realist in me sees 2 problems in this plan:
1. Since my customers are firms, I would have to have a VAT number so that they can subtract their purchase from their income.
2. Is Switzerland still the "tax heaven" people think it is?

Any advice?

Tax

asked Apr 26 '11 at 03:58
Blank
User9982
206 points
  • You should tell in what country you are so we can give advice accordingly. – Sylvain Peyronnet 13 years ago
  • @Sylvain, currently Poland but I may move somewhere else within EU in the next year. – User9982 13 years ago

1 Answer


1

But since I don't have any costs

Really? How you do that? Not renting webspace, not running anything? Come on, you DO have at leat SOME costs. For example your internet, your computer, you know. 19% smells like poland.

Additionally, I would have to pay each month over 200 Euro "social insurance" and initially
would have to pay a tax consultant to make sure I do everything correctly.

Ok, social security is your problem (post tax), but guess what -the tax consultant IS COST.

Add to that the small share of online payment provider

Again, cost.

Any advice?

Check what your counteis law say to stupid people jusst rying to bypass the law that easily. Hint: the government supports you. By furthe reducint your costs. For example, you dont even need rent anymore, they pay your room. And boad. Called prison.

Seriously, be happy. Make as much moeny as you can. Pay 19% and start building a company, but do NOT get into stupid little tax evasion games when you are obviously quite clueless about the basics how businesses run (as in: you dont even see the costs you have).

You need tax advice. Like NOW.

would think that it would be enough to open a bank account in Switzerland

No. Corporate cusotmers want business registration id, want VAT number. Especially within the EU ther regulatio0ns are quite tight by now.
answered Apr 26 '11 at 05:10
Blank
Net Tecture
11 points
  • You are being ignorant and arrogant. I don't need that kind of advice. The costs you mentioned are neglectable. Building a company is not my goal - my goal is to capitalize on 2 years of my hard work and move on. You obviously are clueless about dealing with tax office in Poland. Even if you are 100% legit, the rational thing to do is to make them believe you don't exist. Actually you could just leave the last sentence from your answer. – User9982 13 years ago
  • I live in poland. I pay my taxes in poland for the last years. I pay them more money a month than many people in poland earn in a year. And I NEVER had trouble with them. We got some tax checks, mostly because we always reclaim a LOT of vat (purchases poland, customers international companies, thus no VAT income). Your way of "cashing in" will bcreate TONS of trouble for you in some years. Talk about arrogance and ignorance. – Net Tecture 13 years ago
  • I guess you live in Poland, not "poland". – User9982 13 years ago
  • "I pay them more money a month than many people in poland earn in a year." Great. Any other delusions of grandeur? Just that your company didn't have any problems with the tax office proves what exactly? – User9982 13 years ago
  • That you are ignorant? Acutally polish tax law is very good for entrepeneurs. The only locations I know with nicer laws are either really primitive, or out of reach (ireland has 12.5% iirc, but i dont really want to live there). But your problem is not paying taxes and being an ignorant prick - it is that you dont understand that not running a business will limit your income. And no income = no taxes. – Net Tecture 13 years ago
  • Polish tax practice is so good, but whoever can afford it pays their taxes in Cyprus, right? And companies go under cause the tax official didn't like the owner and had something to prove. The tax rate is only one factor that contributes to the actual amount of taxation. The deductible costs for example are not nearly that extensive as in other countries. Also, in case of micro business (and I cannot be sure I won't end up as one) the obligatory "social insurance" eats up a significant amount of profits - actually you pay it whether you have profits or not. – User9982 13 years ago
  • You called me a prick because I allegedly think that not paying taxes will be good for sales. I suggest you take your head out of your ass and read the last part of my original post. You are always a bully and get away with it? – User9982 13 years ago
  • You ARE ignorant. You think software magically sells itself, dont want to run a business, just make money? Start trading. You think tax offices i other countries are nice? Hahaha - corrupt stupid people work in governments everywhere. What you need is enough money to defend yourself and good lawyers. Everywhere. I find, for example, polish cost deduction rules easy to understand and mostly sensible - a lot more than I can say for the stupid crap tehy shoot at a business owner in germany. – Net Tecture 13 years ago
  • You want loy cyprus taxes without going to jail? MOVE THERE. Live there. Can not afford that - all the ramblings are an ignorant's wishes. Remember, it is not tax frraud this year - it is tax fraud for many years to come until you can spend the money. Buy a house in poland without income? Want a bank credit? Money stashed away is not that eay to deal with. Plus for selling software you NEED either a publisher or a lot of infrastructure, especially business software. – Net Tecture 13 years ago
  • Businesses dont like spending money without paper trail (which you will have), without someone to possibly blame, without SLA, without support, all of which a lonely "I jsut want money" guy can not provide. Wnat to be a lonely guy just making money? You should have learned trading, not written software. – Net Tecture 13 years ago

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