Zero taxes for startups in Albania(digjitale.com) |
Zero taxes for startups in Albania(digjitale.com) |
I think a well developed tech culture and VC companies for example are more important.
sadly, not necessarily, i.e. you can have taxes on gross revenue[0]
In fact the opposite is quite common. Companies do an initial IPO to raise capital and then spend the next few years doing nothing but Cash Burn as they burn up all the capital raised during the IPO.
Eventually, if they fail to deliver a profit they run out of capital to burn and they go under.
Now, in order to have some cash at all, you probably need some income - and that income, minus your costs is the profit, which will be taxed. So you want to turn your cash out for investment into cost, so you could minimize your earnings before taxes.
The catch is, that the investment is going to serve for years, so you can't deduce it all at once - you have to depreciate it (put a fraction of it's price into current years costs). [Of course, another reason is, that your country wants as much as taxes as possible right now, so for it more taxes paid now are better than zero taxes now and higher taxes next year.]
-- This is not an accounting advice, it is very simplified. Limitations apply. Consult a professional if you need it. There might be error due to printing or mistranslation. You know the drill.
In Estonia for example there is no corporate income tax for anybody, until you pay out dividends. At the same time, the employment taxes on top of salaries are 33% + there is a 20% personal income tax. That means net salary is just around half of company's cost. The proposal from entrepreneurs has always been to cap the social and healthcare taxes, because there is no good reason why a more educated person should pay more for healthcare and pensions.
- Internet connection.
- Internet and Digital Laws.
- Banking Options.
- Administrative complications.
- Accounting and Legal infrastructure.
- Office space, living costs, labor work-force...
Companies in Greece have huge problems to transfer money into foreign countries. There is weekly limit and you need approval from ministry for anything over a few hundred Euro. Many of them are moving to Bulgaria or other countries.
There are also many Albanien emmigrants in Greece. Many of them are going back home due to crisis. Many (20%?) people moved from Albania and they really need them back.
And third it is not that bad place to live for Internet based companies. It is near sea, nice weather, cheap etc... EU, Russia, Turkey and Israel are near. Also it is on good path to join EU.
http://taxfoundation.org/article/state-corporate-income-tax-...
And a few states have zero personal income tax:
http://taxfoundation.org/article/state-individual-income-tax...
To be a United States S corp the rules are:
1) Number of shareholders <= 100
2) All shareholders are humans and U.S. residents
3) There is only one class of stock
For more, see: https://en.wikipedia.org/wiki/S_corporation
That's not what I imagine when reading "zero taxes".
This is a misleading statement. S corporations are pass-through entities. In other words, all profits they make get passed through to their shareholders as income, who then pay taxes on their personal tax returns at their personal income tax rates. So technically the S corp is paying zero taxes, but only because they're being paid elsewhere by the owners.
So how would this (S Corp) be different from what Albania is offering?
i assume individuals (?)
Which is still a great incentive for those business owners, but the title is misleading. This isn't about start-ups.
And, I'm guessing Albania has individual income tax. Also, I'm pretty sure most of those countries with low or zero corporate taxes have individual income taxes.
But it goes both ways. Switzerland is one of the few countries where employees do not need to work five days a week to pay the bills. Some tend to work Monday-Wednesday, because 60-80% of a middle-class salary is enough to live on. On Thursday and Friday one can chill or bootstrap something.