Best Country for Trading (Tax efficiency)

[Mtrader]

Europe is socialist and has highest income tax system in the world. You really think you trade free tax in Europe and not have to pay other taxes. End up with lower taxes than where? Which country are you comparing Europe against?

Europe is not socialist, some countries in Europe are, but others are not.
Depending of which place in Europe you are located in, the tax level for natural persons vary between 0% and around 60%.
Europe is divided in a lot of countries that each have their own tax system.

 

[dw31583]

Europe is socialist and has highest income tax system in the world. You really think you trade free tax in Europe and not have to pay other taxes. End up with lower taxes than where? Which country are you comparing Europe against?

Darling, Europe is:
1) bigger than your country
2) more free than your country
3) bigger consumer than your country
4) bigger producer than your country
5) more democratic than your country
6) has less debt than your country
7) has lower tax rates than your country because each member state has different tax rates
8) Europeans are not tax slaves, consequently unlike you, we're free to vote with our feet
9) has a population about 60% higher than your country
10) and we have the best passports on the world

Well, if Europe is socialist then don't forget that slavery was legal in the mighty democratic US. You know what he said in the movie, don't you?

"Ah America. Built for the blacks, owned by the Chinese."

 

[dw31583]

Oh dat mighty US passport is not even in the top 10. Isn't this list full of European countries? Above the US? hmm that mighty American democracy. My American buddy it seems like your world is rapidly changing.

 

[Commodity_Trader]

as it turns out, Germany has a favorable tax for future trading comparing to rest of western Europe.it's 26% and it will be deducted immediately from profit in domestic banks/ brokers and it 'll be considered as capital gains .while in neighbor country Austria,future trading income will be taxed as ordinary income (progressive rate) .
is these information true ?

 

[dw31583]

as it turns out, Germany has a favorable tax for future trading comparing to rest of western Europe.it's 26% and it will be deducted immediately from profit in domestic banks/ brokers and it 'll be considered as capital gains .while in neighbor country Austria,future trading income will be taxed as ordinary income (progressive rate) .
is these information true ?

Just because your broker deducts some tax it doesn't mean that it's your final tax bill. If you're trading then you have to pay income tax + social security in Germany.

 

[Commodity_Trader]

does any one know what's the difference between trading via a LLC and trading via individual account ?,for example in some countries ,corporate tax and employee tax are at different rates. , for example in Ireland ,corporate tax is 12.5% , but employee tax is at 40% of income . so , a trader who trades via LLC in Ireland will be taxed at which rate ?

 

[Mtrader]

does any one know what's the difference between trading via a LLC and trading via individual account ?,for example in some countries ,corporate tax and employee tax are at different rates. , for example in Ireland ,corporate tax is 12.5% , but employee tax is at 40% of income . so , a trader who trades via LLC in Ireland will be taxed at which rate ?

You answered the question already yourself:

• corporate tax is 12.5%. So the company pays the corporate tax but the money stays in the company. You cannot just take it and spent it personally. Because that will be considered as income for you. You can take it as dividend, but will pay again.
  
• employee tax is at 40% of income. Here you take a salary and you pay the income ( and social security) tax. This salary is deductible as expenses in the company and therefore no 12.5% corporate tax will be levied on that salary.

There are differences depending on which country is involved.

 

[dw31583]

does any one know what's the difference between trading via a LLC and trading via individual account ?,for example in some countries ,corporate tax and employee tax are at different rates. , for example in Ireland ,corporate tax is 12.5% , but employee tax is at 40% of income . so , a trader who trades via LLC in Ireland will be taxed at which rate ?

First, you cannot form an LLC in Ireland. Second, there are type of companies which are subject to the corporate tax and there are companies which are not.

For instance, a company limited by shares (LTD) is subject to corporate tax at the rate of 12.5% on trading income and 25% on passive income. However, a limited liability partnership (LLP) is not subject to any corporate tax but its members must include their share of profit from the LLP in their personal tax returns and must pay income tax on it. The LLP's partners may also need to pay social security on their share of profit if they were actively involved in the day to day management and the LLP's results are highly dependent on that partner's work. For instance, your case is a perfect example of that scenario.

If you would use an LTD then it would likely pay 12.5% then you would have to pay income tax on the dividends or salary received from the company. However, there are better alternatives in Europe, for instance, you can choose Hungary and your company would pay a flat 9% regardless of anything or you can choose Estonia and your company would pay 0% on the retained profits and 20% at the time of distribution.

Alternatively, you may relocate to Bulgaria and trade stocks on any EEA stock exchange but in my opinion you should avoid multiple positions in a single day. The tax rate? 0%.

 

[Commodity_Trader]

Just because your broker deducts some tax it doesn't mean that it's your final tax bill. If you're trading then you have to pay income tax + social security in Germany.

As it turns out , if someone who has a main career besides trading, have to pay only 26% on his trading income & it's different from his main career.compared to rest of Europe it's a good rate. so in your opinion someone have to pay even additional tax on that ?!
https://en.wikipedia.org/wiki/Flat_rate_withholding_tax_(Abgeltungsteuer)

 

[dw31583]

As it turns out , if someone who has a main career besides trading have to pay only 26% on his trading income .compared to rest of Europe it's a good rate. so you say that you have to pay additional tax on that ?

I heard this bs from various people about various countries. Let me explain.

You earn $50,000 with your regular job and you make $30,000 with trading. Yes, then chances are you won't have to pay additional taxes. However if you earn $50,000 with your job and you make $100,000+ by trading actively then chances are they gonna say that is your primary source of income thus you should regular income tax + social security.

It's just like the spread betting in the UK. If you have a job and you earn $100,000 plus you make $100,000 by "betting" then it may be tax free however if your trading (betting) income is significantly higher than your regular income than they can say that it's your primary source of income, your profession and they gonna tax you.

Seriously, if you really want to pay tax then why don't you just pay 10% in Bulgaria and 0% on EEA share trading?
You must understand that the tax authorities are not stupid anymore. They'll tax you based on common sense. If your story is fishy then save for the fines.