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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

#141

Post by tomcam »

jmyeet wrote: post #92

The developed world is increasingly facing a funding crisis brought on by this propaganda that if we tax corporations and the very wealthy then they'll leave. One of the most farcical examples of this is the decades-long race to the bottom on business taxes and incentives between Kansas City, Missouri and Kansas City, Kansas. For the non-Americans out there, this is basically one city but it sits at the border of two…

Clear explanation, thanks. Seems that many companies have moved from California to Texas or Tennessee. Am I wrong?

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

#142

Post by pyrale »

WalterBright wrote: post #108
v5v3 wrote: post #100

Earlier quoted context omitted.

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.

> Why do you think that might be?

This kind of rethorical question is annoying. If you have an opinion, state it.

> Perhaps the Germans could make their IPOs more business friendly

The main reason companies tend to get listed in the US (or, in the case of many large existing companies, to get listed there on top of their existing listing in their home country) is that the US stock market is the largest in the world, and listing there means easier access to more would-be buyers, and therefore better market capitalization.

I suspect your advice to German policymakers wasn't "somehow make Frankfurt the largest trading place in the world", but that's litterally what it would take.

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

#143

Post by csomar »

merek wrote: post #134
csomar wrote: post #103

Earlier quoted context omitted.

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.

It's not bankruptcy if the company has no liabilities. You're allowed to wind down a profitable company because you can't be bothered running it any more. A question of legality might come from German authorities determining if this is solely to avoid tax, which is open-ended. It might be hard for them to make this argument if you can prove you transferred operations to country X to maximize company's growth, access…

> You're allowed to wind down a profitable company

I can't speak for all jurisdiction but on one that I worked in, this is not legal. This might be more defensible if the company really is just you but not if it has employees and can operate with a different CEO than you.

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

#144

Post by imp0cat »

throwawayoldie wrote: post #82
_zoltan_ wrote: post #75

Earlier quoted context omitted.

no, because bureaucrazy in Germany is rampart.

He didn't live in Germany.

He actually lived in Berlin for a few years before he died. But you're right, he spent most of his life in Prague. However, his native language was German.

Certainly an interesting man. I highly recommend checking some of his work (ie. The Metamorphosis).

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

#145

Post by weinzierl »

"not. As soon as your net worth goes beyond ~€2m, you can afford fancy tax advisors which set up a trust in Liechtenstein for you."

Is it really that complicated to go that route? This is an honest question, I have little knowledge about these things, but from the outset: How hard could it be to set up a trust, especially in Liechtenstein, where presumably there are already thousands of them and this kind of business is basically an economic sector of its own.

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

#146

Post by tomcam »

refurb wrote: post #118
dismalaf wrote: post #28

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

It's an exit taxes, but as far as I'm aware, it simply taxes you on all assets as if you disposed of them the day you leave. That doesn't seem particularly unfair. If you can image a scenario where someone buy Apple at $1, and it's now worth $1,000. They just leave Canada, pay no tax, then sell in a low tax jurisdiction. However, it can be a massive pain in the ass for illiquid assets or assets you don't intend to se…

> it simply taxes you on all assets as if you disposed of them the day you leave.

Same thing in the U.S. but I think the first $800 or so is exempt.

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

#147

Post by gopher_space »

probably_wrong wrote: post #132
WalterBright wrote: post #122

Earlier quoted context omitted.

The best civic thing a business can do is provide a valuable service and thereby make money. Just look at all the wonderful things we have as a result - airplanes, internet phones, air conditioning, cars, agriculture, movies, AI - the list is endless.

The Internet evolved from Arpanet, a network established by DARPA. Given that was created by a government agency, and therefore funded by the same taxes companies are trying to avoid, I'd argue that it's a great example for why companies should indeed follow their civic duties and pay their taxes. It's also worth pointing out that many of those "wonderful things" had to be regulated by governments due to how bad thei…

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

#148

Post by 1718627440 »

tastyfreeze wrote: post #86
FooBarWidget wrote: post #84

Earlier quoted context omitted.

> German company now has 0 in revenue, wind it down and leave. You forgot about employees. If German employment law is anything like the Dutch one, then it means you can't wind down the company while you have employees. They may refuse to leave. Firing them may be subject to government approval, who may also refuse.

Dumb American here but that sounds like a few steps too far in employee protections. A business can't even die without government approval?

It's because the government essentially takes over the employees, buy paying non-employment money. You deciding that some people don't work for you anymore creates costs for those people and also for the community.

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

#149

Post by laurencerowe »

profstasiak wrote: post #138

Isn't USA even worse? If you move as US citizen to EU, you would need to pay bot h local EU tax and USA tax right? (I am not a USA citizen, this is legit question)

Double taxation treaties negate this somewhat, but there are a bunch of edge cases.

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

#150

Post by littlestymaar »

gopher_space wrote: post #147
probably_wrong wrote: post #132

Earlier quoted context omitted.

The Internet evolved from Arpanet, a network established by DARPA. Given that was created by a government agency, and therefore funded by the same taxes companies are trying to avoid, I'd argue that it's a great example for why companies should indeed follow their civic duties and pay their taxes. It's also worth pointing out that many of those "wonderful things" had to be regulated by governments due to how bad thei…

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I'm afraid he's not (that was pretty much Milton Friedman's position as well as all of his UChicago fellow, which is the reason why we're back to the gilded age with robber barons all around)
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