16 replies to this topic

[internetservices]

How does one setup a paypal account so they do not have to pay taxes on that money, I know some countries like hong kong and panama allow you to setup a corporation and you pay a yearly fee and dont pay taxes. Does anyone know some ways to avoid taxes?

[dynamoeffects]

Might as well rob a bank. You'll go to jail for the same amount of time.

[cannuck1964]

There are many ways of setting up business outside of your country of origin. Moving your operations to one of these countries will allow you to avoid taxes based on the rates your country is charging. You need to speak with a tax specialist to aviod capital gains taxes etc. Then you just take a payment from the corporation you have set up outside of the country, this payment (salery) is taxable though at the current tax rates of the country you reside in.

I am looking into this as well, as the laws are very tricky and I plan to live in two different countries so I generally need only pay tax in one of then (generally the lower taxed one). If you want additional information, google brought back some good links when I queried for "low tax countries".

cheers,
Peter M

Edited by cannuck1964, 11 March 2007, 13:03.

[enragedcow]

internetservices, on Mar 8 2007, 12:48 PM, said:

How does one setup a paypal account so they do not have to pay taxes on that money, I know some countries like hong kong and panama allow you to setup a corporation and you pay a yearly fee and dont pay taxes. Does anyone know some ways to avoid taxes?

This sounds like a great idea. Once you are able to avoid paying taxes, make sure you also stop using tax funded services - so no more driving on roads, calling the police or fire department, no claiming social security, no protection from the military, no unemployment insurance, no security when you fly aboard an airplane (Oh, and no air traffic control either), no FDIC insurance on your bank accounts... need I go on? Don't be one of those people who make all the rest of us pay for your selfishness.

Edited by enragedcow, 26 March 2007, 13:45.

[cannuck1964]

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so no more driving on roads, calling the police or fire department, no claiming social security, no protection from the military, no unemployment insurance, no security when you fly aboard an airplane (Oh, and no air traffic control either), no FDIC insurance on your bank accounts... need I go on? Don't be one of those people who make all the rest of us pay for your selfishness.

Nothing selfish about not wanting to pay taxes. If there are legal ways to avoid them, then they should be exploited. If you are so concerned about all of those programs feel free to donate more funds of yours to them, myself, I will look for legal ways to avaiod them (is that not the idea of what tax deductions are all about??)

The idea of avoiding taxes legally is just fine with me and many others, while avoiding them illegally is not, so until the politicians change the laws, I will use what is placed in them to limit my liability to the government (who I thoink wastes too much anyways).

cheers,
Peter M

[enragedcow]

cannuck1964, on Mar 26 2007, 09:55 AM, said:

Nothing selfish about not wanting to pay taxes. If there are legal ways to avoid them, then they should be exploited. If you are so concerned about all of those programs feel free to donate more funds of yours to them, myself, I will look for legal ways to avaiod them (is that not the idea of what tax deductions are all about??)

The idea of avoiding taxes legally is just fine with me and many others, while avoiding them illegally is not, so until the politicians change the laws, I will use what is placed in them to limit my liability to the government (who I thoink wastes too much anyways).

cheers,
Peter M

Tax deductions and offshoring your money to avoid taxes are *completely* different.

Yes, taking certain government supported deductions and credits is one thing - trying to find ways to shelter money from the government and thus avoid taxes is a whole different story. In most cases, doing so is, in fact, illegal - and even if it's not, don't you think there is fundamentally something wrong with saying, "I'm not going to pay taxes, but I'll go ahead and use all the services they pay for anyway" - regardless of if you find a loophole to exploit or not. No matter how you justify it, in the end you're making everyone else pay for services you use. How is that fair, regardless of legality?

[cannuck1964]

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Yes, taking certain government supported deductions and credits is one thing - trying to find ways to shelter money from the government and thus avoid taxes is a whole different story.

Not really, in the first case, you are tring to find as many deductions as possible to lower your tax burden, in the second case you are looking to lower it by utilizing specific laws which were designed so that off-shoring for corporations could benefit.

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In most cases, doing so is, in fact, illegal - and even if it's not, don't you think there is fundamentally something wrong with saying, "I'm not going to pay taxes, but I'll go ahead and use all the services they pay for anyway" - regardless of if you find a loophole to exploit or not.

I am not advocating the use of illegal means to avoid taxes, conversely, I find nothing wrong with the idea of using any legal means to avoid taxes, if you feel that everyone should pay regardless, then you should look to lobby for the removal of all tax loopholes. But good luck with that...

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No matter how you justify it, in the end you're making everyone else pay for services you use. How is that fair, regardless of legality?

That is how it should be, no one can avoid taxes, conversely governments know that and know it is a bottomless wallet which can be accessed at anytime, and increased without issue. Many of the things given away by governments are generally done to promote their parties, big business or without a care for what the average person wants or needs.

I pay my taxes, I just feel if there are ways to avoid taxes, then I will use them, and you are free to do so yourself, or you can not, but do not come to me and complain that I should not use the available laws to lower my tax burdon, when they were designed specifically like this by these same gov officials to lower their taxes...

Peter M

[enragedcow]

cannuck1964, on Mar 26 2007, 01:23 PM, said:

I pay my taxes, I just feel if there are ways to avoid taxes, then I will use them, and you are free to do so yourself, or you can not, but do not come to me and complain that I should not use the available laws to lower my tax burdon, when they were designed specifically like this by these same gov officials to lower their taxes...

Peter M

I agree, in that if there are specific deductions / credits you can take, within reasonable confines, that's fine.

However, there are a myriad of loopholes people can exploit - and while they can often be "legal" in the strictest sense of the word, that doesn't mean they are "right". This is a big grey area of course - but I think when you hear about a multi-millionaire who pays virtually no taxes due to creative use of loopholes and such, that's not generally viewed with much admiration and respect.

In any case, I'm more talking about this whole issue of off-shoring. That's essentially working to hide the money from the government, thus reducing tax liability. This is, I feel, wrong - regardless of any possible laws to the contrary.

The whole point is that there really are shades of grey here, of course - it's hard to know where to draw the line exactly - but deductions/credits aside, I think offshoring is almost always a bad idea.

[cannuck1964]

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I agree, in that if there are specific deductions / credits you can take, within reasonable confines, that's fine.

And who is to judge what the confines are? Are you going to let us know what they are or let the people who are elected to do so? You are really taking a simplistic view of taxes and how they work.

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However, there are a myriad of loopholes people can exploit - and while they can often be "legal" in the strictest sense of the word, that doesn't mean they are "right". This is a big grey area of course - but I think when you hear about a multi-millionaire who pays virtually no taxes due to creative use of loopholes and such, that's not generally viewed with much admiration and respect.

What is legal is right simple, else it is not legal and hense not right. The idea of a gray area, is a perception, and what you may judge to be gray, is very clear and black and white to others.

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In any case, I'm more talking about this whole issue of off-shoring. That's essentially working to hide the money from the government, thus reducing tax liability. This is, I feel, wrong - regardless of any possible laws to the contrary.

Well might it be that to person who does this really does not want to have any of the so called benefits from the country, I have no hope for any social security that will give me a reasonable life style, and the idea that I should make sure all others have the same life style even if they worked or not does not site well with me.

The millionaire who does not pay taxes is a falicy, no one can get away from not paying taxes, rather they may not pay huge amounts is all, and that irks some who feel they should pay much more so that they have a higher burdon. Yet it is the millionaire who generally worked harder to obtain the money and who does more for the community in donations and charities.

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The whole point is that there really are shades of grey here, of course - it's hard to know where to draw the line exactly - but deductions/credits aside, I think offshoring is almost always a bad idea.

Off shoring is there for many reasons, and one of them is for tax shelters. Without tax shelters, then global investment will be much lower, (ie the selling of treasury bills or bonds etc). If you want to say that people should not use what is available and that only big business should, I think then you are way off base. There is no gray area here, there are laws which allow people to do business in a way which lowers the tax liability is all....

cheers,
Peter M

[dynamoeffects]

The OP is talking about evading taxes, not avoiding them. There is a significant difference. If he wanted to setup a corporation outside of the US to take advantage of lower tax rates, fantastic. But he's talking about evading income tax. This isn't a discussion about deductions, this is a discussion about how to hide your income so that the IRS (or equivalent in your country) cannot tax you. That is illegal, no matter how much you want to justify its righteousness. This is not a "gray area."

No matter how much you believe that the government screwing the little man, this forum shouldn't be used for the discussion of illegal practices, "gray" or not.

[cannuck1964]

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How does one setup a paypal account so they do not have to pay taxes on that money, I know some countries like hong kong and panama allow you to setup a corporation and you pay a yearly fee and dont pay taxes. Does anyone know some ways to avoid taxes?

I think you need to re-read the OP. He is not asking to evade, he is asking to avoid. He is looking to set up a corporation outside of the USA, so no where is illegal activities implied nor referred to there. And then the idea of avoiding (I call it minimizing ) is just fine to discuss.....

cheers,
Peter M

[dynamoeffects]

I understood the OP quite well.

"How does one setup a paypal account so they do not have to pay taxes on that money. I know some countries like hong kong and panama allow you to setup a corporation and you pay a yearly fee and dont pay taxes. Does anyone know some ways to avoid taxes?"

Avoiding taxes is deducting your home office expenses. Evading taxes is moving your income offshore so that the government won't know about it. It doesn't matter if he used the word "corporation" in his post, he's looking for ways to avoid reporting that income which is a completely different subject.

[cannuck1964]

If you were to research the subject you too would find thast you can open a corporation in several countries. These corporations have a set fee associated with them. There are no taxes related to them. Now to avoid taxes on them, you would need to have several other things in place, which would then leave you in a position to avoid taxres. He spacifically asks for additional information concerning this...

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do not have to pay taxes on that money.

This is correct, you avoid taxes on these funds by paying a yearly fee to use the corporate account in the country. Now to avoid taxes you will need to ensure ownership and transfers of funds fall within the countries terms and tax laws.

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dont pay taxes

Exactly, the idea here is not to pay taxes, thus avoiding them, this is done by not bringing the funds into the country, and depending on ownership etc of the corporation, taxes do not need to be paid.

There is nothing illegal about this, but there are requirements needed to be adheared to to capitalize on this....

Generally Trusts etc are used for this....

Peter M

[dynamoeffects]

Either the tax laws in Canada are completely different than those in the US, or you are arguing for the sake of arguing. As a US citizen, your offshore corporation is fine and dandy, but as soon as that money reaches your paws, you owe the government a percentage. All income is taxable. Period. There are deductions that you can take which will lessen your tax burden, but all income is taxable. Even that money that appears in your offshore account. This is basic US tax law and seriously doubt that Canada is much different.

Like before, when we discussed whether customer feedback is vital to a business or not, we're going to have to agree to disagree. I feel that both of us have far better things to be doing.

[enigma1]

internetservices, on Mar 8 2007, 11:48 AM, said:

How does one setup a paypal account so they do not have to pay taxes on that money, I know some countries like hong kong and panama allow you to setup a corporation and you pay a yearly fee and dont pay taxes. Does anyone know some ways to avoid taxes?

what is interesting about this is that in countries where free enterprise flourishes like US, the tax system is specifically designed to boost commerce. Obvious why. For example if you examine a 1040 form, you will see for self-employment tax (applicable to merchants in US who use osCommerce) you get taxed an incredible 2.9% when your net earnings annual income surpasses $94,200. Plus an extra $11,680.

And I guess you must find this outrageous or something?

[glenn1723]

dynamoeffects, on Mar 26 2007, 03:41 PM, said:

All income is taxable. Period.

Just want to point out that the IRS does not define the word 'income'.

[petercullen]

Some time ago, (a decade or so) one of our (Australian) Tax Commissioners declared that "" while it is NOT an offence to arrange ones' affairs so as to MINIMIZE the tax one pays, it IS an offence to AVOID TAX"".

No one "enjoys" paying tax, but USA would, like Oz, have similar "allowable deductions" etc, so as to MINIMIZE the tax payable.