Finding a better alternative for Estonian company in 2020

Discussion in 'General Business Forum' started by Kalexi, Feb 14, 2020.

  1. Kalexi

    Kalexi UKBF Newcomer Free Member

    1 0
    Hello folks!

    I know that similar topics were already discussed in other threads, but every case is very special (including mine) and situation is changing month to month.

    Nature of my business: online marketing services. 80% of income from non-UK partners, 20% from UK partners.

    My physical location: I’m a German citizen.

    Current situation: I’m using Estonian e-Residency program and OÜ (kind of LTD) company. No employees (and no are expected).

    PROS: no need to pay any taxes in Estonia if money will not be distributed as dividends.

    CONS: but I want to use this money and therefore once I want to get my dividends, I have to pay 20% as corporate tax in Estonia, and then ~35% as income tax in Germany. So, in total ~ 50% goes to taxes.


    Looking for a better alternative I’ve found a UK-based LLP as an option (my wife can be a second partner). After reading several resources, I understand that in this case only 20% of my income will be subject of UK corporate tax, while another 80% will be subject of only income tax in Germany.


    Questions:
    1. Is LLP indeed a better option for my case or there are some significant cons?
    2. If I’ll go LLP way - is there any Brexit impact expected for my case?
    3. Maybe there are better options for my case I must consider?

    Many thanks in advance!
     
    Last edited: Feb 14, 2020
    Posted: Feb 14, 2020 By: Kalexi Member since: Feb 14, 2020
    #1
  2. eteb3

    eteb3 UKBF Regular Free Member

    106 9
    This looks wrong to me.

    A UK LLP pays no corporation tax: it's pass-through for tax, limited for liability. If you were a UK taxpayer, you and your wife would pay income tax on the whole of the profits, apportioned according to the partnership agreement (or 50:50 absent an agreement).

    https://www.wealthprotectionreport....-LLP-and-what-tax-advantages-does-it-have.cfm
    https://www.coddan.co.uk/same-day-l...ted-liability-partnership-taxation-in-the-uk/
     
    Last edited: Feb 15, 2020
    Posted: Feb 15, 2020 By: eteb3 Member since: Jul 18, 2019
    #2
  3. Argentum Tax

    Argentum Tax UKBF Contributor Free Member

    40 10
    I strongly suggest you see an accountant who is experienced in these matters. I think you are labouring under many misapprehensions and may be very confused.
     
    Posted: Feb 16, 2020 By: Argentum Tax Member since: Aug 24, 2015
    #3