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AVOID income and corporation tax?
Posted by admin on Oct 2nd, 2008
I live and work in the U.K and i have an LLC in Delaware
The reason for creating the LLC in the U.K is to avoid paying corporation tax,
Delaware has no sale tax and because online business services are tax free (we have an online business).
Now that doesnt mean that i avoid income tax ..hmm our business bank accounts is in Germany
we have personal bank accounts in the U.K and portugal..
As I understand it and correct me if i am wrong.
I only need to pay income tax for the country that i am working in( i already do for my full time job in the uk) .. so if i transfer money from my business bank account in Germany to my personal uk account i have to declare this money and pay income tax for them …
What happens if i deposit this money to my account in Portugal (not resident of this country ) and then withdraw them form portugal.. i guess i don’t have to pay income tax to the uk .. is that correct ?
If you are not domiciled in the UK it will depend on whether you are managing your LLC from the UK. If you are, you are liable to UK tax on its profits.
If you’re not, then provided the profits stay outside the UK, there is no UK tax. Whatever of the profits you bring to the UK, whether directly or through Portugal or after a round-the-world trip, is subject to UK tax.
It’s a complicated subject. You really ought to consult a tax adviser for specific guidance in your circumstances.