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Ask HN: Are there better countries to start my SaaS company for tax reasons?

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Re: Ask HN: Are there better countries to start my SaaS company for tax reasons?

#61

Post by zo1 »

matt4077 wrote: post #52
yummyfajitas wrote: post #49

Earlier quoted context omitted.

Question: "Comcast sucks and is overpriced, are there any other internet providers that give me a better deal?" Answer: "You've had all the benefits of the internet, which you've already overpaid [1] for. Rather than switching to a better internet provider, it's time to return part of the favor." Spot the flaw in your comment yet? It's a generic non-response that applies to every possible service and ignores the fact…

Your argument is quite dishonest, which is why those non-working 80-year olds living on the dole are starting to have trouble reading your grey text. As to your spotted flaws: firstly, it's obvious that people start their lives with 20+ years of being as net recipients of government transfers, and while the services you consumed may have been paid for at the time, those that paid them would now like their pensions, a…

>"It's unfortunate that three-year olds are not in a position to rationally choose to rather live in Somalia, and that they therefore become part of a social contract they never actually signed – but can you come up with a better arrangement? It's very similar with parents, btw."

What about the rights of the parents? They are the custodians of the child's consent until they are able to make their own decisions. I.e. Their right to choose that their children not be part of some abstract contract even if they are themselves? Of course, then statists like to suggest "Well then, move to Somalia if you don't like it".

I've had this discussion, in multiple forms, starting in different spots, multiple times. It eventually gets to the Somalia suggestion (to the point of cliche), and the only logical point to make after that is: "States have taken up ALL land, including Somalia". Until you can offer people an alternative, or a logical and systematic way to get out of this weird contract of yours, then you can't possibly say that it's voluntary. Maybe even allow them to pay back all the "benefits" they have gotten, if it is even possible for such wishy-washy concept.

The problem is, you don't allow it. Even the richest persons on this world would not be "allowed" to "buy" their freedom from the "social contract". Because you use this wonderfully magical argument that says that all your wealth is owed to the "safe" society that government has provided. Convenient, yet choice and consent is magically not required.

Re: Ask HN: Are there better countries to start my SaaS company for tax reasons?

#62

Post by Gys »

jwr wrote: post #40

Consider yourself lucky and incorporate in the US. Do not, under any circumstances, even think about running a SaaS business from Europe. EU has made invoicing hell for small businesses, especially those selling SaaS. You will spend time on things like VAT number checking, verifying customer's country using their IP (yes, I know), several kinds of invoices, prices inclusive or exclusive of VAT, calculating VAT for ea…

VAT is payed by the buyer. The percentage depends on the country where the buyer lives. The seller is required to collect the VAT from the buyer and pay that to the relevant country tax authorities.

The location of the seller is irrelevant for calculating, collecting and paying European VAT. Its applicably to any company in any country in the world.

However, for now having a company outside the EU does make it more difficult to be tracked by EU tax authorities. But its likely that at some point in the future that will change. And tax authorities fine easily.

Re: Ask HN: Are there better countries to start my SaaS company for tax reasons?

#63

Post by [deleted] »

jwr wrote: post #40

Consider yourself lucky and incorporate in the US. Do not, under any circumstances, even think about running a SaaS business from Europe. EU has made invoicing hell for small businesses, especially those selling SaaS. You will spend time on things like VAT number checking, verifying customer's country using their IP (yes, I know), several kinds of invoices, prices inclusive or exclusive of VAT, calculating VAT for ea…

[deleted]

Re: Ask HN: Are there better countries to start my SaaS company for tax reasons?

#64

Post by afarrell »

jwr wrote: post #40

Consider yourself lucky and incorporate in the US. Do not, under any circumstances, even think about running a SaaS business from Europe. EU has made invoicing hell for small businesses, especially those selling SaaS. You will spend time on things like VAT number checking, verifying customer's country using their IP (yes, I know), several kinds of invoices, prices inclusive or exclusive of VAT, calculating VAT for ea…

> verifying customer's country using their IP

If you use direct debit (which is also cheaper), isn't this taken care of for you are charging their bank account directly?

Re: Ask HN: Are there better countries to start my SaaS company for tax reasons?

#65

Post by GordonS »

afarrell wrote: post #64
jwr wrote: post #40

Consider yourself lucky and incorporate in the US. Do not, under any circumstances, even think about running a SaaS business from Europe. EU has made invoicing hell for small businesses, especially those selling SaaS. You will spend time on things like VAT number checking, verifying customer's country using their IP (yes, I know), several kinds of invoices, prices inclusive or exclusive of VAT, calculating VAT for ea…

> verifying customer's country using their IP If you use direct debit (which is also cheaper), isn't this taken care of for you are charging their bank account directly?

From memory, I think you need to capture 2-3 different location 'proofs', of which IP address is typically one

Re: Ask HN: Are there better countries to start my SaaS company for tax reasons?

#66

Post by Cyph0n »

geff82 wrote: post #45

As a European, I would choose the US any time. More friendly biz environment, many consultants there knowledgeable and no one, even the Europeans, ask why you are there and bill from there In case you have some really simple mass-market product, you could also consider the Dubai Internet Free-Zone where you have ZERO percent taxes, only about 3000 Dollar fees in the beginning (and some cost for license renewal every…

I'm quite surprised no one else has mentioned Dubai.

Re: Ask HN: Are there better countries to start my SaaS company for tax reasons?

#67

Post by leesalminen »

Gys wrote: post #62
jwr wrote: post #40

Consider yourself lucky and incorporate in the US. Do not, under any circumstances, even think about running a SaaS business from Europe. EU has made invoicing hell for small businesses, especially those selling SaaS. You will spend time on things like VAT number checking, verifying customer's country using their IP (yes, I know), several kinds of invoices, prices inclusive or exclusive of VAT, calculating VAT for ea…

VAT is payed by the buyer. The percentage depends on the country where the buyer lives. The seller is required to collect the VAT from the buyer and pay that to the relevant country tax authorities. The location of the seller is irrelevant for calculating, collecting and paying European VAT. Its applicably to any company in any country in the world. However, for now having a company outside the EU does make it more d…

If/when that happens, I would halt sales in EU on my niche SaaS. EU is a fraction of my user base and just wouldn't be worth all the hassle.

Re: Ask HN: Are there better countries to start my SaaS company for tax reasons?

#68

Post by atmosx »

I can make a case for Bulgaria. The corporate tax is 10% and the insurance tax is about ~ 50 to 80 EUR/month (can't recall exactly). If you pay dividends it's an additional 5%.

Banking service is rather poor, although they tend to reply via email in 24h. Finding an accountant that does speaks/writes English properly and reply on a timely manner can be a challenge but it's not impossible, especially in Sofia. On the other hand, in other cities you could get an accountant for 1/10th of the cost.

The major benefit is that the legislation is stable which is a big plus. Requirements for opening bank accounts are pretty loose compare to most other European states, although account expenses are considerably higher to neighbour states - but still we're talking ~ 120 USD/year. Starting a business is easy and rather straight forward. Most official documents (like company statute) come in PDF with official (reckoned by the BG state) digital signature on them. As long as you pay your taxes, mail your invoices to your accountant, etc. You're good to go even if you live in Alaska.

Re: Ask HN: Are there better countries to start my SaaS company for tax reasons?

#69

Post by Bashmaistora »

Start making money before worrying about taxes.

If you are planning to bootstrap the company then incorporate wherever you want. On the other hand, investors would be a lot more comfortable investing in a US company and clients prefer to deal with other US companies.

Re: Ask HN: Are there better countries to start my SaaS company for tax reasons?

#70

Post by disordinary »

New Zealand: http://www.doingbusiness.org/rankings, well actually Singapore because the corporate tax rate is lower (both countries have a corporate tax rate lower than the US).

But seriously if you're based in the US and all of your employees are based in the US then pay tax in the US. The US government doesn't look kindly on tax shells and unless you've got a lot of money to spend on accountants and lawyers you're going to struggle. The US is the only country in the world that forces their citizens to pay tax on income earned (and taxed) while living overseas, so if you were thinking of relocating to a tax haven you'd end up paying more tax once your income reached a certain threshold.

And it's only going to get tougher with the new administration.

Just pay your taxes, and take joy in the fact that you're contributing to the society that you live in.

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