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Exit Tax: Leave Germany before your business gets big

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Re: Exit Tax: Leave Germany before your business gets big

#101

Post by Joel_Mckay »

dismalaf wrote: post #28

Canada also has an exit tax. For individuals as well as businesses.

They do tax on residency rather than citizenship. If you are a structured embezzler in another country, than expect the CRA auditors after 184 days in Canada.

Also, Canadian laws don't stop at the border as a citizen... so breaking laws in other places still puts you in legal peril for extradition.

Notably, corporate tax rates are often much lower in Canada, and export free trade is available with most trading partners. Note the US taxes on citizenship regardless of where you live (or if you hold multiple citizenship), and failure to file your IRS statement was an $8k fine last I heard. The fine often stays even if you owe the IRS $0, and temporarily live in another region.

The TLDR version: talk with corporate tax accountants in each region before filing, and do not assume the late tax filing fines will magically not apply to your situation. AMCHAM will usually help guide investors on their filing obligations for type C corporations in the US. =3

Re: Exit Tax: Leave Germany before your business gets big

#102

Post by dismalaf »

Joel_Mckay wrote: post #101
dismalaf wrote: post #28

Canada also has an exit tax. For individuals as well as businesses.

They do tax on residency rather than citizenship. If you are a structured embezzler in another country, than expect the CRA auditors after 184 days in Canada. Also, Canadian laws don't stop at the border as a citizen... so breaking laws in other places still puts you in legal peril for extradition. Notably, corporate tax rates are often much lower in Canada, and export free trade is available with most trading partne…

Departure tax for individuals:

https://www.canada.ca/en/revenue-agency/services/tax/interna...

Departure tax for corporations:

https://www.canada.ca/en/revenue-agency/services/tax/interna...

Re: Exit Tax: Leave Germany before your business gets big

#103

Post by csomar »

merek wrote: post #61

There's a note at the end > You could, of course, sell or wind down your company, which would solve all problems outlined here. But this is not an option for most entrepreneurs. For a software business, you could presumably: - Incorporate a company in your country of choice - Transfer subscribers from German company to new foreign company (depending on payments provider, this can be a massive effort, for example, not…

This is fraud and you'll end up in jail. Your company is not "you". You are a shareholder but as a CEO, you should do what's best for the "company" and what you described is criminal activity to bankrupt the company.

Re: Exit Tax: Leave Germany before your business gets big

#104

Post by csomar »

akersten wrote: post #3

Is there a look back period? What stops me from selling my business to my buddy the day I leave and then buying it back the day after?

Your taxes should work out the same (or worse). Exit tax is akin to you selling all your properties at the point of exit.

Re: Exit Tax: Leave Germany before your business gets big

#105

Post by Joel_Mckay »

dismalaf wrote: post #102
Joel_Mckay wrote: post #101

Earlier quoted context omitted.

They do tax on residency rather than citizenship. If you are a structured embezzler in another country, than expect the CRA auditors after 184 days in Canada. Also, Canadian laws don't stop at the border as a citizen... so breaking laws in other places still puts you in legal peril for extradition. Notably, corporate tax rates are often much lower in Canada, and export free trade is available with most trading partne…

Departure tax for individuals: https://www.canada.ca/en/revenue-agency/services/tax/interna... Departure tax for corporations: https://www.canada.ca/en/revenue-agency/services/tax/interna...

That is nuts, I always assumed that would fall under the capital gains taxes in the investors T5 filing at the end of the year. (could be dramatically lower rate if you get stuck with cash at the end of the year)

Now I know why the brand trademarks are usually held by an independent entity, and licensed to a domestic number company.

I guess that is why we pay the corporate accountants. lol =3

Re: Exit Tax: Leave Germany before your business gets big

#106

Post by WalterBright »

_zoltan_ wrote: post #74
stouset wrote: post #72

Earlier quoted context omitted.

This take is wildly out of sync with the reality that the U.S., as one of the few developed nations without free healthcare, pays more for their healthcare than all of them while having worse than average outcomes. The worst healthcare is in reality American healthcare. We pay through the nose for the privilege of getting terrible results.

Switzerland has almost the same system as the US, and it works - when my wife needed an MRI, she got referred at around 11am by a specialist, for a call around 1pm to see if she's available that afternoon. She wasn't so they agreed on the next day. Is it expensive? Yes. Does it work? Absolutely.

I received a CAT scan a couple years ago, about 4 hours after I wandered into urgent care. Before they stuffed me through the toroid, I asked the operator to set the dials to 1988 so I could advise my former self to buy MSFT with everything I had.

The bill was quite a whopper, though Obamacare paid most of it. Of course, my Obamacare premiums are about 4x what they were before Obamacare.

Re: Exit Tax: Leave Germany before your business gets big

#107

Post by WalterBright »

vjvjvjvjghv wrote: post #71
WalterBright wrote: post #66

Earlier quoted context omitted.

"Free" healthcare always turns out to be the most expensive healthcare.

I call BS on this statement. And German healthcare isn’t even free.

Of course. And historically, US health care costs rose at about the rate of inflation until the late 1960s, where the curve tilted strongly upwards at a much higher rate, and continues today.

What happened in the late 1960s? The advent of "free" healthcare!

Re: Exit Tax: Leave Germany before your business gets big

#108

Post by WalterBright »

v5v3 wrote: post #100
WalterBright wrote: post #67

When businesses are fleeing, you're doing something very wrong.

Not necessarily. As USA is the main destination for IPO, wouldn't many German companies naturally leave? Also once you are successful you can afford to pay the costs to arrange the companies affairs in a tax efficient manner e.g. utilise low tax regions with the EU such as Luxembourg and wider world.

> As USA is the main destination for IPO

Why do you think that might be? Perhaps the Germans could make their IPOs more business friendly, so they have no reason to flee.

Re: Exit Tax: Leave Germany before your business gets big

#110

Post by libraryatnight »

WalterBright wrote: post #67

When businesses are fleeing, you're doing something very wrong.

Or they're doing it right and someone else is doing it wrong, often the wrong thing appeals to business as the wrong thing is quicker and higher profits. Not saying that's the case with Germany, but it sure doesn't feel like you're default doing something 'wrong' if you're scaring people who already seem to hate paying their taxes.
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