Really great community here and lots of useful information.
I haven’t yet found my particular use-case, so hoping for some clarity.
I am a Belgian citizen, travelling fulltime in 2020 (and probably beyond) while running/starting a business.
Moving country to country, I will not have any domicile for at least a year.
For 2020, I will have a reference address in Belgium which will be valid for 1 year (note: it’s not a domicile; it’s just an address for mail).
I assume my personal tax for 2020 will have to be paid in Belgium as I will not settle anywhere else (and not planning to).
The Belgian government will claim since that I do not actively live anywhere else and still have ties to Belgium (reference address, bank accounts, etc.) I am a tax resident of Belgium; and that’s OK (for now).
However, the corporate landscape in Belgium is far from ideal, e.g. corporate tax around 30%, minimum wage of 45.000€ (excluding social tax), high social security payments, etc.
That’s why I’m considering incorporating a company in another EU State Member.
One of the possibilities is obviously e-Residency (Estonia).
My reasoning is as follows, and it would be nice if someone could confirm my claims:
- Cost of setting up a company is quite low (e.g. 250 euro) compared to Belgium where it’s +1,000 euro (notary, accountant, etc.).
- Profits are not taxed as long as they remain in the business. Distributed profits are taxed at 20%, lower than the Belgian’s 30%.
- Wage requirements for company owners are far lower than Belgium. In Estonia, gross wages of 900-1000 euro are deemed accepted while in Belgium we are talking 45.000 per year (3.750 per month).
If your yearly revenues are too low to give yourself such a wage, you need to pay 100% of the taxable profit as wage to yourself.
- The wage burden of Belgian companies is one of the highest in the world. Gross wage of 3.750 costs the company at least 150% of it.
In Estonia it will be far lower, around 130%.
- Both rates above (130 and 150%) include social taxes.
Am I free to choose to pay for Estonian social tax as opposed to Belgium?
Even if all the work will be conducted outside Estonia and Belgium?
What’s the difference? I read that social security in Europe is valid everywhere. How does this work?
- Numerous service providers that will take care of the legal aspects for acceptable fees.
My business will sell non-physical products to clients residing in Belgium and The Netherlands ONLY.
Would Belgium accept an Estonian business and the tax logic above?
Thanks a lot!