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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

#171

Post by kmlx »

csomar wrote: post #143
merek wrote: post #134

Earlier quoted context omitted.

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.

> > 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.

which jurisdiction doesn’t allow you to shut down your own company?

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

#172

Post by throwmeaway222 »

bmacho wrote: post #136
geff82 wrote: post #126

The crazy thing is that as a business owner (GmbH/AG) you can’t even move to another EU country any more since 2022. As the owner of such a company it feels like I have become a slave of the government.

Why can't businesses be owned by people that: - enjoy owning and managing a business - do think that owning and managing a business should come with the same compensation as any other dayjob (hairdresser or whatever) While managing a large amount of money naturally lead people to have enough to buy luxury items, IMO, this is just a sad fact of our world, and we should fight against it.

communism, and with this sentiment, no one will want to run a business. the country will wither and die

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

#173

Post by hasnd »

oulipo wrote: post #163
weinzierl wrote: post #155

Earlier quoted context omitted.

As a German I couldn't agree more. I am your age and even I consider leaving. If I was still young I wouldn't be here anymore. I think the combination of capital and skilled labour fleeing is very concerning and a trend that could end up self-reinforcing and hard to stop.

[flagged]

[flagged]

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

#175

Post by weinzierl »

oulipo wrote: post #163
weinzierl wrote: post #155

Earlier quoted context omitted.

As a German I couldn't agree more. I am your age and even I consider leaving. If I was still young I wouldn't be here anymore. I think the combination of capital and skilled labour fleeing is very concerning and a trend that could end up self-reinforcing and hard to stop.

[flagged]

US as destination is so unrealistic that I'd never really considered it. Also this was about leaving Germany, not necessarily leaving Europe.

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

#176

Post by DrBazza »

hiAndrewQuinn wrote: post #161
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)

US-EU transplant here. No, the United States does not have anything even vaguely similar like this. Seriously putting forward the idea of an exit tax on anyone who owns more than 1% of any LLC worldwide would in all likelihood be deeply politically unpopular. It goes against the very name and spirit of a limited liability company, for one. For two (real ballpark number here) about 1 in 10 Americans would actively be…

> You're probably instead thinking of income tax, which the US does levy worldwide contrary to virtually every other nation on Earth and is, I can tell you from personal experience, not fun.

That's certainly what I was thinking of, given I have a few US friends here in the UK. Isn't the way to stop that to simply give up dual citizenship?

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

#177

Post by traceroute66 »

weinzierl wrote: post #145

"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…

> How hard could it be to set up a trust

I have little knowledge of these things either, I've only heard second hand because aspects of historical tech $work used to put me in close proximity to professionals who deal with these things. Eventually you get a noob level understanding once you've been in the same room long enough.

TL;DR A trust is not a "simple" legal form like a company is.

You have to consider the three-way "internal" relationship (settlor trustee beneficiaries). Which can be legally structured as you wish (blank sheet when writing the trust deeds). And then for "external" relationships (trust third party), the in-country law will apply and so you need to know how that fits in.

Then you need to know what type of trust you want. Do you want a Fixed Interest Trust ? A Discretionary Trust ? A Charitable Trust ? A Special Purpose Trust ? Something else ?

Then you have things like professional relationships. Your trust will, for example, almost certainly need an in-country bank account. Your professional advisor will almost certainly know some bankers.

So sometimes its easier just to hire an advisor, work through the prep, then fly in for the day for a nice lunch with your advisor to sign a few papers.

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

#178

Post by EndsOfnversion »

FredPret wrote: post #60
EndsOfnversion wrote: post #36

Earlier quoted context omitted.

Lets drop you into the mid Cretaceous period and see how far your education takes you. Without the contributions of millions of others on a daily basis you’d have nothing.

In business, you pay for those contributions. Milton Friedman describes how a pencil is made with the self-coordinated efforts of millions of people around the globe: https://www.youtube.com/watch?v=67tHtpac5ws

Dinosaurs don’t take credit cards

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

#180

Post by logicchains »

enricozb wrote: post #167
chaosprint wrote: post #154

Norway also has crazy exit tax and wealth tax. I heard lots of complaints that this system makes it almost impossible to build a decent vc-driven tech startup.

However it also prevents hoarding wealth, which in turn prevents special interest groups and some forms of election manipulation. Balancing taxes for fairness and innovation is quite tricky...

>However it also prevents hoarding wealth

Hoarding wealth isn't a problem if no wealth creation happens in the first place.

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