Trading for a living & taxes in EU

Discussion in 'Taxes and Accounting' started by w4rri0r, Feb 18, 2018.

  1. schweiz

    schweiz

    I agree with you. What you posted is correct. All depends first from what your intention is.

    I was refering to the usual offshore propositions that always pop up in this kind of discussion.
     
    #51     Feb 24, 2018
    Quiet1 likes this.
  2. mccc

    mccc

    @schweiz
    The maximum for social security contributions is around €16k/yr, so it doesn't quite come out to 70%, more like 55%.
    But as you said, it's easy to relocate within the EU. Bitcoin is still a really easy market and I'm confident that I can make plenty more millions from it, so I don't see any risk in making this move. Worst case scenario I hate my life there and move back, best case I save millions in taxes.
    Let's say I rent a place in Estonia, open a bank account, move all of my money there, register as a resident, unregister in Belgium, and start trading. Does that make me an Estonian tax resident from day 1? It could be arranged within a few weeks.
     
    #52     Feb 24, 2018
  3. schweiz

    schweiz

    Is not as simple as it looks. A few things I know:

    • you must by law inform the Belgian tax authorities BEFORE you leave Belgium. They will do an investigation and make the final declaration of the actual taxable year.
    • If you move all your money to Estonia it is possible that Belgium might ask information in Estonia and find out your million bitcoin profit. They might ask you then where this money is coming from. If you keep it in a crypto wallet nobody will know.
    • General rule is that the place where you are physically defines the place of taxation. It is almost always mentioned in the double tax treaties between countries.

    What you should to is go to PWC, Deloitte, E&Y or KPMG and use them to setup the whole thing. It will cost you a few thousand euro, but the alternative (doing it yourself) can cost you hundreds of thousands of euros if things go wrong ( if Belgium catches your 1 million bitcoin profit). What is the cost of using a professional if you make 1 million every year? The answer is: peanuts.

    Als watch out in Estonia. If you sell your bitcoins and put the money in your bank account they might ask about the origin of this money. Laws against money laundring and criminal money.
     
    Last edited: Feb 24, 2018
    #53     Feb 24, 2018
  4. mccc

    mccc

    My intention has never been to hide my profit from the Belgian tax authorities. I'll pay whatever I have to pay until the day I move. But thanks for your input, I've got a good idea of what's possible now. I'll go to a tax professional and hear them out before I decide anything.
     
    Last edited: Feb 24, 2018
    #54     Feb 24, 2018
    manter and schweiz like this.
  5. Vindago

    Vindago

    I honestly do not see the OP point, if you make enough money trading (100K$ or M$) it is not such an issue to pay taxes, in Italy for instance you pay a flat 26% on your gains, nothing more...
     
    #55     Feb 24, 2018
  6. schweiz

    schweiz

    I think it depends of what generates these capital gains. The law is not clear to me:

    For individuals and companies capital gains are generally added to the regular income.
    • The rate of tax payable on capital gains interest and dividend from shareholding is 26% for non-qualifying shareholding of up to 25% in a unlisted company.
    • For the purpose of calculating a capital gain, the gain is decreased in line with the rate of increase in inflation, from the date of purchase to the date of sale. In regard to capital gains in a corporation, identical relief is allowed at the rate of increase in the Index.
    • Companies pay 24% tax on capital gains. In sale of participation, 95% is tax exempt, subject to certain conditions.
    So if I trade futures it is added to my regular income? Much higher taxed then 26%. It would be 43% then as it is higher then 75,000 euro.
     
    #56     Feb 24, 2018
  7. Vindago

    Vindago

    I am no Tax adviser but to my knowledge (and that of my tax adviser) you should pay income tax on your job income if you have any (I do not) and pay a flat 26% on your capital gains from trading. in fact if you trade through an Italian broker the 26% is automatically deduced from your gains.

    I am quite confident that your trading proceeding will not be taxed as part of your income, but you should double check with your tax adviser just to be sure...
     
    #57     Feb 24, 2018
    schweiz likes this.
  8. Vindago

    Vindago

    by the way the above is true for Italy alone, other countries may have different way to treat capital gain, for instance in Switzerland there is no tax on capital gains if these are considered as personal capital management, but if it becomes a significant part of the person income than it may be treated as work income and be subject to income tax and social deductions...
     
    #58     Feb 24, 2018
  9. d08

    d08

    Residency in Estonia is based on the days you spend there (should be over 6 months a year), whether your family is there (this is what I got from Estonian authorities) and that you have a permanent address in the country.
    If you move before the end of June of that year then yes, with the above-mentioned conditions it should make you a resident. It's also best to alter the electronic records (address, residency) as soon as possible.

    Why would anyone want to live in the EU while earning a large income is beyond me though. The environment where there is a growing acceptance on abusing tax payers and spreading the money on useless "euro projects" which only enrich the friends of politicians can only end one way...
     
    Last edited: Feb 24, 2018
    #59     Feb 24, 2018
  10. d08

    d08

    This.
    I wouldn't be surprised if some travel to places like Panama to withdraw and carry cash back, the 10k EUR limit applies but even with a flight, it's still a better proposition.
     
    #60     Feb 24, 2018