Home Forums Money matters Making $6m a year – moving to low tax rate country

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  • #1000174
    oijdwai0192
    Member
    • Total posts: 1

    Hi All, (the following is a client of mine, not me, and I need some guidance)
    I have had a website that was making small amounts of money via adds/subscriptions.
    In the last few months the website has taken off and it is generating approximately $500k per month in revenue.
    I run this business as a “company” entity and the tax rate is 27.5%. However the money I want to take out ($5-6m per year) will eventually be taxed at the highest rate of approximately 47.5%.
    I would like to figure out a way to minimize the tax payable. While having access to the money (not keeping it in the company).
    My question is, as my only expense is my laptop, my website and my content, and the website is generating such high revenue, I wanted to leave Australia and move to a country that has a very low tax rate, perhaps Malaysia or Hong Kong.
    Does anyone have any experience with this or can point me to someone who has experience in setting up a structure in an overseas company and moving there permanently?
    I understand this decision would purely be to save tax, however if the difference is 20% tax rate compared to 47% when dealing with income of $5m, I believe this is worth me leaving Australia permanently.
    Thanks.

    #1223267
    JamesMillar
    Participant
    • Total posts: 1,675
    oijdwai0192, post: 269806, member: 117883 wrote:
    Hi All, (the following is a client of mine, not me, and I need some guidance)
    I have had a website that was making small amounts of money via adds/subscriptions.
    In the last few months the website has taken off and it is generating approximately $500k per month in revenue.
    I run this business as a “company” entity and the tax rate is 27.5%. However the money I want to take out ($5-6m per year) will eventually be taxed at the highest rate of approximately 47.5%.
    I would like to figure out a way to minimize the tax payable. While having access to the money (not keeping it in the company).
    My question is, as my only expense is my laptop, my website and my content, and the website is generating such high revenue, I wanted to leave Australia and move to a country that has a very low tax rate, perhaps Malaysia or Hong Kong.
    Does anyone have any experience with this or can point me to someone who has experience in setting up a structure in an overseas company and moving there permanently?
    I understand this decision would purely be to save tax, however if the difference is 20% tax rate compared to 47% when dealing with income of $5m, I believe this is worth me leaving Australia permanently.
    Thanks.

    Why would you need to move if your client is the one making the money? Isn’t it their tax problem? What sort of service do you provide to this client?

    #1223268
    LucasArthur
    Participant
    • Total posts: 3,158
    JamesMillar, post: 269833, member: 5318 wrote:
    Why would you need to move if your client is the one making the money? Isn’t it their tax problem? What sort of service do you provide to this client?

    Good question.. my biggest query is why dont they diversify? instead of skirting laws and regulations.. unless Monaco is appealing..

    #1223269
    Paul – FS Concierge
    Moderator
    • Total posts: 3,120

    Hi And Welcome to Flying Solo [USER=117883]@oijdwai0192[/USER] .

    It is great to have you!

    Thank you for joining our community and posting.

    Getting some paid Accounting and potentially legal advice is recommended because whatever you/your client does will likely have to meet intersecting laws. Meeting one law but not all other related laws could be a disaster.

    Cheers

    #1223270
    steve201
    Member
    • Total posts: 278

    Hi,

    My take on this scenario is ,
    What country is your website hosted?
    What is the need to live on $5 million to $6 million dollars annually?
    What country houses the money as a tax resident?
    Have you ever sought legal advice?

    thanks.

    #1223271
    bb1
    Participant
    • Total posts: 4,472

    I’m confused if it’s you or your “”client””

    If it is seriously for a client, why oh why would you be coming to a forum to ask for an answer as important as this. We all know if there is one question, and 10 people reply, you will be given 27.5 opinions, all of which will be wrong.

    If this is a serious question, get them to spend one of their million’s on an accountant knowledgeable in this area. And if I was them, I wouldnt be asking you for advise, if you are getting it from a forum.

    #1223272
    RunicConvenience
    Member
    • Total posts: 186

    I guess the character in this story never existed and has moved onto other fantasies. . . .

    also if I had someone who I was a client for airing my details like this I would also be removing them from my employ.

    #1223273
    Tact
    Member
    • Total posts: 71

    So I have this…friend…

    I find this is a pretty common problem in the tech space because the business can grow very very quickly. The answer is quite nuanced and would require more details unfortunately.

    Hate to say it but you’re going to have to call an accountant.

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