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Running SMM business | Tax advice? Currently doing illegal

Discussion in 'Business & Tax Advice' started by Dr. Tomahawk, Aug 14, 2019.

  1. Dr. Tomahawk

    Dr. Tomahawk Registered Member

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    Hello,

    I'm running a SMM business which is generating a 4-digit profit per month. I'm not working under my name, nor is the domain or anything else related to my real identity.

    However, I'm living in the European Union where the tax policy is fairly strict. I'm a bit scared that the tax office will be in front of my door one day. Can this happen?

    The problem is that I'm a student and not working anything else. I have a real credit card + bank account where all the money goes to. As far as I know, the bank gives some information to the tax office and if they notice that I'm getting thousands even though I'm not really working I may be fucked up.

    What's your advice? The problem is, that selling Followers and Likes is a grey-hat business and I can't imagine opening a real company with that? Furthermore, I would lose a lot of money due to the high taxes.

    Anyone experiences with that? Does the bank and credit card company give out information to the tax office? Is there a way for them to catch me?

    Thank you!
     
  2. ILearnSEO

    ILearnSEO Jr. VIP Jr. VIP

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    "As far as I know, the bank gives some information to the tax office and if they notice that I'm getting thousands even though I'm not really working I may be fucked up."

    Not in an EU country, while being part of Europe lmao.

    I had the same issue since I cleaned a lot of money from various business on a yearly base. I had no further issues all i had to do is to pay my tax. Which I don't belive will be an option for you. Better move full time legit and lose some money than losing everything including your head.
     
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  3. sire243

    sire243 Jr. VIP Jr. VIP

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    Setup a company and start paying yourself a small salary if you need to pay your bills.

    If not then just keep all the money inside the company.
     
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  4. miniblicher

    miniblicher Registered Member

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    Or open a new bank account in a country where the tax is low. And then just get a credit card to the bank. You cant go out and buy a house for it. But for daily use "fun money" thats fine.
     
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  5. Naroha

    Naroha Supreme Member

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    No man. They can't catch you....
    Just pay your taxes as everyone else. If you dont like the tax system in your country feel free to choose another as you are working online. It is a shame that you as a student doesn't know the value of taxes and what they provide to you.
     
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  6. Dr. Tomahawk

    Dr. Tomahawk Registered Member

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    The problem here is how the money is earned. I can't register a company for "selling followers". This is ridiculous, isn't it?
     
  7. Naroha

    Naroha Supreme Member

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    Why not? where are u from?
     
  8. kickthat

    kickthat Jr. VIP Jr. VIP

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    Set yourself up as a social media agency, or marketing agency. If you're operating as a sole trader, or even as a limited company in many cases then it's very unlikely that you will be questioned as to the actual specifics of what it is you are doing. If asked, state that you help clients raise their profile on social media.
     
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  9. Dr. Tomahawk

    Dr. Tomahawk Registered Member

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    I'm from Germany.

    It's a shady business. I'm also not planning on doing this for a long-term but now it's working quite well for me. Your selling fake profiles to people...

    I don't have experience with that. Will anybody know what I'm selling exactly if I register a company? Or can I just tell them I'm doing "Marketing" and nobody will ever know what I'm exactly doing?
     
  10. Kidades

    Kidades Junior Member

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    4 digits is a lot for someone who's unemployed. You should start a company to be safe.

    Don't worry about your business being shady. Just because it's against the company's ToS doesn't mean it's illegal. You'll be fine, even if you tell them exactly what you're doing.

    In my country we have a company with fixed taxes (around 250-300€ per month) regardless of the amount received, as long your yearly revenue doesn't go above 50k€.
     
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  11. chill_pill

    chill_pill Newbie

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    You are selling digital/marketing services.

    The best option for you IMO is setting up a normal company in a place in Eu with low taxation, and ask to the accountant to consult you on the overall situation.
    Like this you will have a normal business and you can also take out the money from the company without any problem.

    Plus you can deduct all your expenses thru the company. It's a nice solution to go kinda-white! :)
     
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  12. COBNETCKNN

    COBNETCKNN Junior Member

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    inside EU bulgaria might be most friendly country for kind of taxes you are willing to pay... I think it's fixed 10% doesn't matter amount of money... so if things get sketchy consider opening some sort of business in bulgaria because if you are living alone, no kids, german tax policy gonna make you naked dry :D best of luck
     
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  13. chill_pill

    chill_pill Newbie

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    Yup, 10% on profits plus 5% on dividends
     
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  14. damagesmith

    damagesmith Jr. VIP Jr. VIP

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    General Advice.
    Setup a company. You dont need to declare exactly what you do. As long as what your doing is not 100% illegal.
     
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  15. Chizz

    Chizz Regular Member

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    I don't think that you are in trouble if they see you making thousands as a student, what matters is that you pay tax on it. Maybe they can ask you how you made this money, but you can simply indicate how you made it, by providing marketing to companies.

    As other people mentioned, set up a company in Bulgaria or Cyprus or so, that have low corporate tax rates and pay yourself a salary(only that much that you need to cover your living expenses). Let the rest of the money sit in the company and invest that to scale things..

    Also, you can set up a company in Germany even with activity social media marketing. They are not going to ask you the nitty gritty about how you provide your services, and social media marketing is a fair activity which describes what you do right?
     
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  16. nobb

    nobb Newbie

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    Hi there, do you still need support in this matter? I can provide professional support.
     
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  17. socialmediagirl

    socialmediagirl Newbie

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    I heard about there is a method: "Estonia e-residency" and starting a company online. But I haven't use it for myself, yet. You can search it on Estonia government official website.
     
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  18. Unreliable Witness

    Unreliable Witness Power Member

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    You're asking people on a marketing forum about tax law in a specific country. You probably need to talk to a local accountant.

    You can't choose whether you pay tax or where you pay it. If you live in Germany (if you're tax resident there), you're obliged by law to pay tax to the Federal Central Tax Office. If you don't, you're breaking the law.

    You could set up a company in a lower tax jurisdiction, since a company is treated in law as a separate person. But it would still have to pay tax wherever its located, and you'd have expenses of running it (hiring an accountant, paying for a virtual office address). You'd also still have to pay income tax on the money you repatriate back to Germany (the money you pay yourself). At low levels of revenue, doing this won't save you any money.

    Provided you are not acting illegally (which you are not - selling likes is only greyhat to the social media companies), exactly what your business does is not a concern for anyone else. Its simply providing marketing as a service.

    You would be best to set up as a freelancer (you don't need to register to do this as I understand). You won't pay any tax on the first €9,169 you earn. Only on the amounts above that. You also don't have to pay social security - just lower rate at 14% and the solidarity surcharge.
     
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  19. OffshoreSecrets

    OffshoreSecrets Newbie

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    Lol horrible advice...

    First off, the amount of taxes you have to pay, has absolutely zero to do with the tax rate of the country in which your bank account is located.

    Secondly, opening a bank account in a low tax jurisdiction, will not magically make you having to pay less taxes.
     
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