The reclaimable part of vat (on things you buy for your company) is most of the time peanuts compared to paying the 21% vat on what you've sold... So... vat is not so nice at all.... in the end you always pay more then you can claim back... If you can claim more vat back then you pay... then you don't have a profitable business...

From a business point of view VAT doesn't cost me anything.

Every time i have to collect VAT from a client (and that happens maybe 5 times a year for me) I just pass that money to the tax office and that's it.

and i return i get VAT back for everything I buy for the company

VAT is really no problem.

And corporate tax in CZ is 19% - acceptable.

and then there are ways to also (legally) minimize your personal taxes.

Sure but personal taxes over there is like 15% or 16% right? So theoretically many people would be able to get it down to around 10% easily, and you're laughing all the way to the bank :1orglaugh

unfortunately it's not so easy - the problem her is that they don't have a cap for health insurance, social insurance etc.

which means: when you earn a lot of money, you pay a lot for that.

so the solution is that (as a business owner) you pay yourself only a low salary and pay the rest by profits from your company (that you hopefully have :1orglaugh )

but overall it's manageable and actually I don't have a problem paying my fair share.

In B2B it might seem so, but the end price is higher for the end customer and thus impacts his buying power.

VAT decreases overal demand as higher prices for any reason.

There seem to be a lot of good and bad things about each country.

You just need to look at them in all the areas you like and decide which is best for you.

do you really give it a lot of thought when you buy something?

in the US it annoys me cause sales tax is never included and i always get surprised when the final price is higher than i thought before.

but here VAT is always included in the price and when i buy something (privately) i never calculate the net amount and then decide not to buy it

I won't calculate net amount as it's irrelevant when I am bying as a invidual. But it is hard not to notice that does something cost 30 euros or 35, or what ever the VAT is. You know, the price is higher, and at least I am not that rich that I could and would buy regardless of the price or how much I have money.

What countries in the EU? I wouldn't recommend anyone to move to Sweden. Except immigrants, they get everything they need for free + more!

Sweden is horrible when it comes to business, the taxes are so fucking high, there's barely anything left.

Gee, you're an unbelievably good citizen.

A government's wet dream.....

Remind me to buy an island, set it up as a tax haven, lure webmasters over with lower tax rates and fill the island with people who don't have a problem paying their fair share. :1orglaugh

yeah, well, schools, infrastructure, police, hospitals... these things don't just pop up magically from thin air :winkwink:

why would you say that? I've only lived in canada but i'm interested in your thoughts on it. Its safe here sure but I don't exactly see the opposite in the other countries you say you have lived it.

I think its expensive to live/do business here myself.

how is the language barrier out there? I know czech isn't exactly the easiest language to learn.

i survived 8 years of living here without speaking Czech...

would be nice to speak it but especially in Prague you can get along without it.

and there are services like Foreigners.cz that help you with authorities etc

If you are reasonably healthy, reasonably hard working, and reasonably smart, then use this link:
List of countries by Human Development Index - Wikipedia, the free encyclopedia

It will give you a pretty good indication of what kind of life quality you could enjoy in each country.

Ease of doing business:
Ease of doing business index - Wikipedia, the free encyclopedia

And of course, add your own preferences too if you really decide to move - Norway is pretty much No1 in anything you pick, but I wouldn't move there permanently even if you give me $10 mil, just way too cold for my taste.

Though Norway is a fucking expensive country. Your US dollar based earnings would diminish into air.

I already get masochistic satisfaction when trampling in the snow, so Norway would be just fine regarding that (but not any different).

I'm not starving over vat... but...

I look at it this way... if i don't have to pay the 21% vat (in Holland)... that would be thousands of euros in MY pocket... Sure....i can make myself believe that i calculate the vat to my customers... or i could higher my prices and let customers pay the vat (that would be the same... heh)... but then again.... if i can let customers pay more i really preferrably would have wanted that raise in MY pockets... not the governments pocket.
:)

But if that low salary is not enough to make a living, and you would constantly need to take more money out of the business for personal spending, then what are the tax issues? Or is it just a case of creative accounting?

It's the same in my country. Personal income from job is taxed higher (any bigger sums) than taking money as a dividents. Thus it is most beneficial to pay salary to itself up to break even point, and beyond that to take the money as a dividents.

So, "creative accounting" if you want to use that term, but totally legal. Idea is that you save the dividents, or pay those more often.

Sounds nice...

but in Holland, as a owner of a BV/company (similar as S.R.O in CZ) you have to pay yourself a minimum salary of 42.000 euros so you're automatically in all the high tax ranges:upsidedow

i don't know, i don't look at it this way.

i learned that i calculate my prices and my profits as net amount, VAT is added, paid by the consumer but it's not my money and i just pass it on.


there's no minimum here, our tax accountant back then said to make it reasonable.

in 8 years no one complained.

It's interesting... I think i'll dive into this some more during my next cz visit this december...

btw... by law... who is end-responsible for your bookkeeping in cz? The accountant or the business owner? In Holland the company owner is always end responsible... so having a shitty accountant who fucks it up can get you into real trouble... Finding a trustful accountant in a country where you don't speak the language feels a bit tricky...

with a great bus, i would live in some European country for sure

If you can connect with several long term experienced expats / local business owners this can get much easier, plus there are actually reputable services to find if you ask for enough refererence.

But yes, as far as I know you as a business owner are responsible, not the accountants (like in Russia for example).

There are pros and cons, I'd say it's always more bearable to live in CZ for a foreigner making money off the country than for a local or anybody dependent on making a living under the local conditions, I try to stay away from local business as much as possible.

My income is international, this is the place where I pay my insurance, pay my taxes, otherwise keeping the contact with authorities or locals at minimum. It's a safe and affordable place to live for sure.

I like EU

it really depends on how much you "need" and what you REALLY want out of life...knowing what this exactly is, is no easy task and few people really find out...

for example...you do not buy a ferrari because it has 600hp or titanium bolts, you buy it because you want people to envy you or get more pussy more easily or reasons like that...its not the F1 technology that made you dish out 300K it is the need to feel a certain way or be seen in a certain way...

the amount of this need in you, dictates how much you "need" to earn, in order to live your own personal soap opera where the ferrari makes up for the theoretical short dick...one may argue the "need for speed" as the reason for the 300K but a 10K suzuki gsxr rapes super car ass in every way shape and form, so logic dictates that the 300K is excessive (and GSXR rapes ass :thumbsup )...I have nothing against ferraris, this is just an example of extreme "need", you can put in the word yacht or bentley or whatever...

now that I have defined my view of "need" lets look at the business part of life...the richest man is often not the one with the most money but they one who needs the least...for example if you really really "need" a 300K ferrari then, ultimately, your happiness costs a lot...if you are happy with a 10K bike then your being happy costs exactly 30x less than the ferrari guy...

so in conclusion: if you have a huge penis, pick the country where life is the cheapest, don't be a chump and pay more $ for the same shit only in fancier packing, life is short, go where the cheap pussy is and enjoy :2 cents::thumbsup

You cannot compare the two really ...

• The USA has a uniform federal tax code. The EU tax rates are regulated by the nation-state member.
  
• Labor rates might vary 20% in the USA but the labor rates in Western Europe and Eastern Europe might vary 65%.
  
• The effective tax rates are lower in the USA for business.
  
• Comparing the costs of doing business in London as opposed to New York City might be comparable. There are no comparable American cities to Prauge, Budapest, Bucharest or Sofia.
  
• EU privacy laws and social attitudes toward most adult enterprises are better than the situation in the USA.
  
• Taxation, VAT in particular, is a negative in the EU -- your product's price is less competitive in many global markets.

the majority of the world wish they can migrate to the US, so the US. But a negative is the immigrants coming into the US the last 20 years suck, which is changing the demographics of the country.

can you explain? cause I dont see what you mean

I thought you were a native until I read this. You learn something new every day! :thumbsup

As a Dutch corporation we can sell in the USA without adding VAT -- selling in the EU we have a VAT obligation on all sales.

If you sell to a Dutch customer for example there is a VAT obligation if you sell to a USA customer there is no VAT obligation.


Now, if you are selling labor or finished product produced in a lower wage EU nation-state (read: Eastern Europe) then we are comparing apples and oranges just the same as USA sellers of goods produced in the neighboring nation of Mexico would not be a fair comparison (other than the possibility of doing so -- that is another subject altogether).

You can allocate that taxation to account for government subsidized prices or lower sales, use or VAT rates -- for example the VAT on plain food in The Netherlands is:

1. So, if i buy a Coke in The Netherlands my VAT is 6%
   
2. If I buy a Coke in Michigan, USA in the grocery my sales tax is 0% but if I buy a Coke at the zoo the sales tax of 6% is in the cost -- food and beverage in restaurants and concession foods (Kiosk) are taxible.

Where is the end cost less for a Coke?

1. A bottle of water at Schiphol Airport (Amsterdam) is 3€
2. A bottle of water at Hartsfield Airport (Atlanta) is $2.75 (2.22€)

There is 8% sales tax charged at Hartsfield Airport on the bottle of water so the net price is $2.94 (2.40€)
Where is the end cost less for a bottle of water? Now it is the product and not the tax rate that influences the cost.

When I say consider price I also mean overall cost of the product to the customer.

For domestic transactions, in all of the USA, are subject to a sales or use tax collected by retail sellers then remitted by that seller to the state or remitted directly to the buyer's state, at its state' rate, by intrastate buyers respectively, to their home state (i.e.; New York State or California, etc.); that rate is 5% to 8% in most states whereas the VAT tax rate in the EU nation-states is 18% to 28%. There is a product acquisition cost that is higher to an EU business or person of 13% to 20%.

Your mistake is not considering the buyer's cost and businesses are large buyers of goods. Buying goods for business end use can be very substantial expenditures. I can build a factory (land and improvements) for a lot less in the USA than in most countries in the EU. I will pay sales tax on the building materials in the USA where I will pay EU VAT on the materials AND Labor.

https://www.google.com/search?q=EU+V...erty+transfers

There is no sales tax on the transfer of real estate or the levying of business rents in the USA.


However, if I compare costs for this factory construction between Paris and New York City metro areas the costs are not that much different.

I suggest you decide what "Quality of life" means to you, and what you expect out of the business environment. There are some on this board that are well traveled, and have a good understanding of the various business and tax laws. We might be able to suggest a few places depending on more specific criteria.

- Legal creation of a business in the US can be set up for very little upfront money, and in less than one week (filing to opening a bank account). Taxes are not as bad as people complain, and there are legal ways to reduce tax liabilities even further.

- Cost of living is higher, but so is the quality of family life and friendships in Europe.

Romania is the best

no, you will not.

VAT only applies to consumers, when you build a factory you are quite obviously a business and VAT does not apply.

Russia: in europe and usa, you have a lot of regulations to respect, in russia you just bribe the police and you can do what you want... :my2kopeks

Not quite, the business is the tax collector, pays VAT on raw materials and services it needs, charges it on products it sells, send the difference to the tax inspectors.

The business gathers tax for free.

the only thing that is correct here is that you either receive or pay a balance

but as a business you receive back all VAT on business expenses and the VAT you collect from your clients is and never was your money anyways and you just pass it on

when - like us - you never collect VAT (actually only from CZ clients), we just receive all VAT back we paid on business expenses

seriously - am i the only one who knows how this works?

I know that too :) But problem is with vat as how you need to pay it every month(or every 3 months,depending on amount),and that money could be used for something else.While income tax is much easier to deal with it as it is executed only once a year and you can minimize it by investing on end of year.

There is usually somekind of reporting oblication, both buyer and seller (B2B). I mean trade between countries, inside countries seller also collects the VAT.