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Minimise tax with virtual accounts

Discussion in 'Business & Tax Advice' started by Dragonzone, Jan 23, 2014.

  1. Dragonzone

    Dragonzone Newbie

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    Hi I wanted to find out whether I can limit my tax by linking ebay/paypal accounts to virtual bank accounts.
     
  2. boccas323

    boccas323 Newbie

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    With a simple google search you can find multiple online virtual bank accounts. However most probably you will be required to submit due diligence documents.

    These are documents which by law (at least in EU) are required as part of the job of bank to reduce money laundering and prevention of financing of terrorism. This would include like proof of residence, bank confirmation, copy of passport etc.

    Some banks will require you to deposit and maintain a ?/$ x,xxx amount of money at all times while other might charge you ?/$ x,xxx for the opening only.
     
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  3. altopluma

    altopluma Newbie

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    How much would the tax be if you file your online business as a corporation? Would it be different from the regular tax you receive as a working employee? I remember reading somewhere that if you file your business as a corporation that the tax deduction is significantly reduced.
     
  4. boccas323

    boccas323 Newbie

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    It heavily depends on the jurisdiction you are when:

    a) remit the money
    b) your residence
    c) your domicile

    Different countries have different rules.

    Usually a corporate tax is higher than regular tax but not in all cases. For e.g. in Malta; income tax starts at €8,500 with a low tax rate like 10% and goes higher depending on which category you fall ... e.g. if you earn more than €35,000 you are taxed at 35% (max rate).

    Corporate tax in Malta is at 35% (direct on profit).

    But then we have the full imputation system, whereby foreign companies get 6/7 of the tax paid on dividends payout.

    So as I usually advice, just go to a local accountant and ask him. You will be amazed with the amount of knowledge you acquire. :)