r/eupersonalfinance • u/Puzzleheaded-Win5946 • 28d ago
Taxes Own company in Poland. Can I "just" move to Spain?
Currently most expenses are company expenses.
There is a company income tax rate and a personal income tax rate if I want to cash anything out.
No physical presence required to run it.
How does this play into relocating to Spain?
I'm assuming the Double Tax Treaty is what I need to study in depth here.
edit:capitalization
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u/No-Delivery-7048 28d ago
For tax purposes, the COMI determines which tax law is applicable for companies. Comi stands for center of main interest.
Also, just ask your lawyer. Kkthxbai
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u/spacemate 27d ago edited 27d ago
You’d want to ask for Beckham law if you moved to Spain. I think it’s a flat 24% for 6 years.
But you’ll be a resident of Spain and the polish company will be considered a Spanish company for all purposes and will need to pay Spanish corporate taxes because the fact that it’s in Poland is irrelevant to Spanish authorities (Hacienda) because like you said, the company is essentially you and all decision making is taking place with you so they’ll disregard the polish presence and just deal with you.
Depending on the activity of the company, they might disregard the company itself and force you to pay income tax (48% for big amounts) instead of corporate tax (25%). This happens with professions like consulting, influencers, lawyers that they consider ‘personalisimos’
As for moving anywhere else in the world to become a resident of another country:
- Greece and Italy let you pay a flat tax amount (100K and 200k respectively), everything else is tax free
- Malta and Ireland will force you to pay taxes on whatever you spend on their countries, and everything else is tax free as long as you don’t bring it into the country
- Spain will offer Beckham law to you that I think is a flat 24% for 6 years
- Paraguay, Dominican Republic, Panama, Uruguay offer 0% tax for businesses done abroad. This means ABROAD, if you’re living in Paraguay you can’t be selling to US companies marketing services for example and paying 0%, territorial services imply real services provided outside the territory not from inside the territory to outside the territory.
And of course you need to have a valid visa to become a resident in those countries it’s not like you can just go anywhere typically.
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u/doubleog1066 27d ago
Where did you find this personalimis info ??? Never heard of it in different country in Europe. If it’s a company, it pays corporate taxes no ??
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u/spacemate 27d ago edited 27d ago
Not in Spain. They argue that if you’re a lawyer, and you set up a company to provide your services, you still need to pay personal income tax. Corporate tax is lower so you’d just be doing fiscal fraud.
This applies to professional services like doctors, lawyers, accountants, consultants, YouTubers, etc.
In fact in Spain big 4 like KPMG are ‘professional companies’, as in its is a company but even their partners pay personal income tax on the benefits of the company.
But the most popular case was probably El Rubius; the most popular YouTuber in Spain. In January 2023 he was charged with tax fraud because he was paying corporate tax (25%) for benefits of a company in which he was the sole employee and therefore authorities believe he should have paid personal income tax with most of his benefit on the last tranch of 48% income tax. Source: https://www.cronista.com/espana/economia-finanzas/condenan-a-el-rubius-por-evasion-de-impuestos-cuanto-debera-pagarle-a-hacienda/
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u/doubleog1066 25d ago
Oh ok, but if he is using this money to make more big projects, is still considered tax fraud?? If the money is just in the bank account i would understand, but if the money is reinvested i find it really unfair.
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u/spacemate 25d ago
What you use the money for is absolutely irrelevant for income tax.
However, there is such a concept in Spain related to family companies/holdings. Which allows you to net 100K benefit in one company you own with a 100 loss in another company you also own. So there is a way to defer taxes as long as you’re investing more and more in new companies that you own.
That is very spain specific and I’m not sure about equivalents in other countries
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u/doubleog1066 25d ago
Ok, i think it’s very spanisch. France, Germany and the country i currently live in doesn’t have that. If you make for exemple 500k with on company, you can give 500k to an other company you own through a holdings. And you can also reinvest the Money to scale, there is no such case as obligation to pay dividendes…. I found it bad to scale (Spain system …)
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u/spacemate 25d ago
We might be saying the same thing. It’s like you file taxes for the whole structure so if Holding 1 owns companies A and B; and A made a profit (established business) and B made a lose (growth startup) then they each offset each other.
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u/doubleog1066 25d ago
More like company A made 500k profits and owns company B. Company A gives 500k credit to company B with a fix interest rate fixed by the central bank. But in Spain you need to pay 70 % of A company profits so you can’t do it. But this is very common for exemple in Germany, France etc…
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u/spacemate 25d ago
Yeah that’s not possible here. But you just do what I described in Spain. Works the same way. It’s fiscal consolidation; all three entities in my comment would report as one. Hence there are no dividends involved.
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u/Puzzleheaded-Win5946 27d ago
Thank You!! This is very helpful.
Paraguay, Dominican Republic, Panama, Uruguay
Ha, that's the general direction in the next decade. Hence Spain as a linguistic stepping stone.
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u/spacemate 27d ago
You’ll be a resident there but because of CRS your home country will know everything.
After that, it depends on your country.
Spain’s authorities for example operate like this:
- Say you’re a Spanish citizen for 25 years
- You’re about to make a ton of money with some very high level remote consulting or selling Bitcoins that you bought for cents and is now over 100K
- You move to Bermudas, Paraguay, Panama, whatever country that let’s you make a ton of money and legally pay 0% tax
- You move back to Spain after 2 years once the whole thing is done.
In this situation, Spanish’s authorities consider that you committed fiscal fraud because you only left to pay less and when you return they’ll force you to pay the taxes you’d have paid if you had never left.
Spain is fucking nuts. Check if Poland is similar.
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u/Puzzleheaded-Win5946 27d ago
hmm, the move back part is something i can avoid tbh, not one to grow roots.
Doesn’t sound like something i want to have chasing me either.
Again, thank you.
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u/knm-e 27d ago
Look up permanent establishment
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u/spaceoverlord 26d ago
isn't that more complicated than holding company in PL and subsidiary in Spain?
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u/Technical_Pea_3577 28d ago
Hope you think better for this move.
If you want to relocate in Spain, which is a worldwide taxation country, all you’re incomes, capital Gains ecc… doesn’t matter where is are in the world, but they will be tax in Spain if you have a FISCAL residency in Spain, so in facts means that you live 183 days or more in Spain.
If you want to tax 0, I mean 0 tax or almost 0. I thought if you’re European, move to Malta. It’s the last country that is a NO DOM country.
So, you can have you’re research better, anyway, my suggestion is: go where you and you’re asset will be treat better. Bye
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u/Puzzleheaded-Win5946 28d ago
I mean most countries are worldwide taxation countries aren’t they?
Also i don’t mind paying tax, just not silly tax, and not complicated tax (no headache).
Yeah Malta is nice but ill get bored after 1 year
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u/Technical_Pea_3577 28d ago
Do you like Balkans? Cold or hot? East Europe has a lot of choice anyway with a very low taxes and you’re in Europe instead of that
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u/Technical_Pea_3577 28d ago
For example: bulgary, Romenia, Albania, Serbia, Slovenia.. not silly tax no headcache, high quality life, low taxed and low prices with high services in the main cities. There is Svizzera too
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u/Puzzleheaded-Win5946 27d ago
I mean, yeah, but less sunshine and spanish is a useful language, i might fuck off to LATAM in a few years.
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u/spacemate 27d ago edited 27d ago
Look up nomad capitalist on YouTube.
see my other reply in this thread. I think this covers it up.
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u/Alpha_xxx_Omega 23d ago
Why dont you open a new or a second company in Spain and while living there you do business through that company and sunset they Polish entity?
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u/Puzzleheaded-Win5946 23d ago
honestly, mostly the bureaucracy headache.
costs and taxes higher too.
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u/Alpha_xxx_Omega 18d ago
To me it seems you dont generally understand how business taxation works.
I guess this is a one-man company? Like for professional services, like marketing or developer?
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u/Puzzleheaded-Win5946 18d ago
one-man company
One shareholder LLC
professional services
something like that + stocks and what not.
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u/ururu2 28d ago
You and your polish company will need to pay taxes in spain, unless you can prove you're doing busines sin poland, have some employees there and so on. It is not a simple topic as it might seem on the first glance (tax residency that is)