How to keep the income out of the accounting

[ttt]

I am an affiliate from central Europe running a Ltd. company. Recently I got sick of the incredible tax and other fees taken away from my income. I decided to leave some of the income out of the accounting. Is Skrill a safe way to do it? I was doing it for 10+ years but last 2 years all went through accounting. Was there in the meanwhile any "granted any access" for national banks or states supervisors to Skrill or any other services? Any other advise?

[Malikbhai]

Keep money out of your resident country, in places where your government has no authority to ask for proofs. That's pretty much it what you can do.

Open a bank account in Dubai, for example.

[PROFRBcom]

I certainly do not do this myself, but I have heard of people using cryptocurrencies to bypass the scrutiny of their government.

[MichaelCorfman]

You should be careful. What you are describing is tax fraud, and I believe that is considered a criminal activity in most if not all countries, potentially subjecting you to jail time or very serious financial penalties if you are caught. If taxes are too high in your local jurisdiction, you could consider setting up a second company in another country with a lower tax rate, and repatriating and paying taxes as it makes sense, assuming that sort of business scheme is legal in your country.

Michael

[RacingJim]

I'd rather just pay the taxes in my country and not be constantly worrying about some dodgy scheme coming back to haunt me at a later date.

[tufty]

If taxes are too high in your local jurisdiction, you could consider setting up a second company in another country with a lower tax rate, and repatriating and paying taxes as it makes sense, assuming that sort of business scheme is legal in your country.

This is 100% tax evasion, certainly if you are in the USA or Europe. The only way this can be legal is if you have a fully managed office in that low-tax country and can claim all the decisions are made there. Hard for a one-man-band affiliate to justify this.

As for Skrill, you may get away with it better with skrill than simply not declaring a normal bank account, but if Skrill were asked by any tax authority to show your account with them then they would in a heartbeat. They are not some secretive Panama company but rather a fully regulated, above board company regulated in the UK by the FCA. They are totally open to all tax authorities.

I would agree, maybe best to try to be paid in bitcoin and build your stash there. That of course has its own problems. Who knows where the Bitcoin price will be when you want the cash. No good if you have lost 80% of the value - would have been better to pay the taxes. Also, if you are still in Europe at that time, how will you get that cash without it being traceable? Best option would be bitcoin and move residency to a tax haven before cashing out.

The one good thing about paying taxes - and I hate it - is that the residue of the money can be used to buy houses, cars and whatever you need to spend it on. No good building up a valuable stash but living in relative poverty because spending it will alert the authorities. Only fail-safe option is to move residency. Americans need to do this and change citizenship!

[WagerX]

.......
I would agree, maybe best to try to be paid in bitcoin and build your stash there. That, of course, has its own problems. Who knows where the Bitcoin price will be when you want the cash. No good if you have lost 80% of the value - would have been better to pay the taxes. Also, if you are still in Europe at that time, how will you get that cash without it being traceable? The best option would be bitcoin and move residence to a tax haven before cashing out........

Do you know what would really suck? Getting BTC and then the price of BTC dropping 80%. Then your tax authority charges you with the original earnings, not the existing BTC value. I am sure that has happened here before.

I pay the taxes and get it over with as soon as I can. That way you don't have to worry about ut. It's the cost of doing business.

[Sherlock]

You should be careful. What you are describing is tax fraud, and I believe that is considered a criminal activity in most if not all countries, potentially subjecting you to jail time or very serious financial penalties if you are caught. If taxes are too high in your local jurisdiction, you could consider setting up a second company in another country with a lower tax rate, and repatriating and paying taxes as it makes sense, assuming that sort of business scheme is legal in your country.

Michael

That is the US way of handling things.

In Europe, especially towards east, it is that if you are caught there is some penalty, usually like 50%. So the game there is that if you are caught (1% chance probably less, depends on stupidity of tax fraudster/evader), you pay something extra.

Definitely it is not a habit to go to jail there. The reality is that if the money+penalty are paid and it is the first offense, all criminal charges are dismissed.

Based on my experience the stupid Skrill was ok so far. Or I never had problems and I still keep there my EU address (but my tax residence is in tax heaven). I had big problems with Skrill, but not with authorities. Those ewallets are not full banks, so they are good bet. [for the record handling Skrill is a horror]

If anyone wants to get the access to Skrill nowadays they can get it. The thing is that if you go this way, you should not give anyone reason to do it.

So never do transactions over 10K, use the Skrill card, if withdrawing to some bank account of Skrill then with care and at least in the other EU country (where you can have a bank). Better solution is to have a bank in non EULA country.

Generally work on better solution and move out of rotten Europe. Do not listen to people from USA, they live on different planet that is under IRS mafia. But certain work is vital.

No good building up a valuable stash but living in relative poverty because spending it will alert the authorities.

The more to the east, the less anyone gives a ****.

I really can tell this firsthand. I spent in central Europe quite big money. They are gone now because my exgf took it all. I still keep sending money from offshore to the many bank accounts there, because why not to take advantage of the 100K EUR insurance per bank right. No one gives a ****. Yes banks ask sometimes, but that is because of moneylaundering. But no one from tax office ever came to ask.

There is a risk and the reward. I believe that still not income paying taxes in central and east Europe is a valuable bet, when done with some care and if it is not about VAT, where the things are really tough.

I am not saying it is the right thing to do. Personally I think that if you want to cheat, do it properly and gtfo. But it is something that brings more gain and even if bad things happen, it is possible to get out of it cheaply.

[Strider1973]

I'd say that tax authorities in "central europe" are not stupid.
You have to report your income + your assets. If your income is 100k but your assets grow by 150k, then the taxman should notice that something is wrong. While it is possible to let small amounts "disappear" (e.g. send money form 1 program to Paypal and spend it for personal shopping), it is not possible to let huge sums disappear.
If you don't report your income properly, you'll end up with unreported earnings (probably easiest to hide them in a crypto wallet). But as mentioned before, how to convert that money to fiat later?
Easiest would be to hide it now and later move into a tax heaven - but that's a personal decision.

[Sherlock]

That is the theory, in fact really no one gives/gave a **** until now.

I was sure someone will go after me, i transferred in larger sums (much bigger than I though are those that trigger some action) partially on purpose to see what happens. And nothing happened. Even in some of banks I left partially on purpose my data from old central EU identity... and for my surprise, nothing happened.

5 figures amounts monthly to Skrill are IMO absolutely safe. Skrill even does not ask for tax ID. The bigger problem is the Skrill itself.

[Azureus]

I'd say that tax authorities in "central europe" are not stupid.
You have to report your income + your assets. If your income is 100k but your assets grow by 150k, then the taxman should notice that something is wrong. While it is possible to let small amounts "disappear" (e.g. send money form 1 program to Paypal and spend it for personal shopping), it is not possible to let huge sums disappear.
If you don't report your income properly, you'll end up with unreported earnings (probably easiest to hide them in a crypto wallet). But as mentioned before, how to convert that money to fiat later?
Easiest would be to hide it now and later move into a tax heaven - but that's a personal decision.

Noone is intentionally "stupid" but in the end it is weighing effort and results. Drug enforcement will not go after small time neighbourhood weed deal
er (unless he behaves like a retard) but for sure they will go after a Mexican smuggling gang.

Same with money. State will go after cases which are the biggest benefit (highest proven fraudulent amount) with the least effort (obvious cases with good documentation). As of now in Europe this is for example excessive VAT refunds when you do some funny tricks with cross-border imports and exports and get money out of state instead of actually paying VAT. This is large scale fraud which is not easy to prove but definitely much much easier than your situation OP.

Keep your money somewhere (crypto, other non-reporting country, company account...) and decide to live somewhere where you consider the tax burden more bearable. Then cash out. Again it's relative, if you'd be French, place like Bulgaria may be heaven for you. If you're Bulgarian, you may want some absolute 0% tax haven.

For US citizens everything is 10 times more complicated due to FATCA reporting, IRS powers, various forms (W8BEN etc etc...) and taxation by citizenship which by the way is applied only for United States, Eritrea and since 2019 also Hungary. For US persons there are very few options, maybe Puerto Rico or renouncing citizenship.

If you are not US citizen, then best solution is simply to move out if you live in some "hell" like France or Belgium (that is if you consider it hell of course).

OP it is hard to advice because "central Europe" is a broad term, it depends on the specific country. You should be careful e.g. in Germany, I know a German affiliate who was raided by police with assault rifles at 5 am because they suspected he didn't pay taxes. In the end he paid some fine (didn't get jail time) and now lives in SE Asia.

The general direction is that things will get worse and worse. For example since 2019 there is a new thing in Slovakia called "registracna pokladnica" which logs all transactions made with all vendors nation-wide, both cash transactions and card transactions. It logs the GPS location of the transaction, the name of items bought, their prices, total price and in some cases even buyer's identification details. All this info is sent to a government centralized database. Yes, I'm not kidding. Similar thing works in Czech Republic or Croatia but with relatively more privacy. Now imagine how easily this can be used (should I say abused) in the future - government has access to all transactions, all your shopping behaviour. Even if you use cash, it can be traced back to you if you carry your mobile with you because again your movement data is logged (4 weeks in Germany, 6 months in Czech etc etc.). It is a scary world so really the best advice is to leave because some of these things can (and will) be used against you when you least suspect it and get into some trouble e.g. three or four years from now.

[Sherlock]

The registered counters so far are here only to track payments at merchants that are cash/card/or even crypto!!!. They exist exactly to avoid VAT fraud and then it is against income tax fraud on side of seller. There is no tracking so far on side of customers and the buyer can use cash or anonymous card. It could be probably used on spying citizens, but it definitely is not. It is for small payments only, because the card limits itself are limits. No one will chase you because you eat too much Halusky or drink too much Pilsner.

Czechs and Slovaks copied this from Chrovats as you say, but those systems are common around the world. I saw that even in Latin American countries (where it is combined with offline blocks). In fact the vendors in Latam are stealing much less than for example Czechs. When those registered counters in CZ were introduced, everyone was scared, but now it is laughable. The sellers always try to estimate if you are the controller. I look like homeless, so many times do not bother to give me the bill (you know, sometimes it the system is broken, sometimes the internet is off, sometimes they forget, sometimes they give you just fake bill and only if you grab it, they ask you if you want the real bill, sometimes they ask you directly... and if this does not happen, I always tell them I do not want the bill and then most of the time I see a honest smile [the only smile you see there]). And this is actually the thing on state agenda much more than chasing the 15 affiliates (12 from that are expats) with money at Skrill.

Even more funny in this part of central Europe are the cheats with consumption taxes. For example tobacco. There are quite high taxes on hookah tobacco and many tea rooms or shisha bars in Czechoslovakia. No one pays the taxes = they all smuggle tobacco further from East or Latin America. There are raids of police but they have contingency plans. I heard this year a funny story how police raided from one side, guys run through backdoor, directly to prepared car with the smuggled tobacco from inside. The car was a storage room itself. But even if those cheaters are caught, there is just hefty fine. No one goes to jail (so far).

Maybe you heard about the Bitcoin cafe Paralelni polis. They fight with the Czech premier, they refuse to pay taxes, they work BTC and LTC only. They work for years, they pay no taxes, not even VAT. And sh1t happens. The premier was even there, discussing with them. Now imagine this in the USA...

[Azureus]

The registered counters so far are here only to track payments at merchants that are cash/card/or even crypto!!!. They exist exactly to avoid VAT fraud and then it is against income tax fraud on side of seller. There is no tracking so far on side of customers and the buyer can use cash or anonymous card. It could be probably used on spying citizens, but it definitely is not. It is for small payments only, because the card limits itself are limits. No one will chase you because you eat too much Halusky or drink too much Pilsner.

The difference between CZ and SK in this case is that the Slovak version indeed CAN be used to track your personally and individually, Czech&Croatian version has more anonymization and privacy.

The data collected is insane - now it is officially used for VAT payment evasion, in the future a simple upgrade can make it a 1984-style totatarian big brother that sees everything.

And I mention it for potential situations in which the OP decides to get residency in Cyprus or Malta - however he still stays e.g. in Slovakia some time of the year. It may and will be used against him, if not now, easily in the near future.

And this is actually the thing on state agenda much more than chasing the 15 affiliates (12 from that are expats) with money at Skrill.

Agreed, states are more worried whether you pay 10€ in VAT tax correctly but your 100 times higher transfers which do not go into the VAT system (payment from a Curacao company to a BVI company) are harder to do something about, even if the account is directly under your nose.

Still many countries are implementing laws for proving the origin of your assets (presumption of guilt: can't prove the source -> you're guilty).

Maybe you heard about the Bitcoin cafe Paralelni polis. They fight with the Czech premier, they refuse to pay taxes, they work BTC and LTC only. They work for years, they pay no taxes, not even VAT. And sh1t happens. The premier was even there, discussing with them. Now imagine this in the USA...

This is an outlier case, first of all they are a non-profit and they do accounting and pay taxes. What they reject are these tracking big-brother systems (EET). The state leaves them alone because all they can prove is that there exists this small non-profit coffee shop and officially they claim they do not even sell anything, they just let visitors use a demonstrative system of using cryptocurrency to get a coffee. What should the tax office lady assigned to them do about that? That's really beyond her pay grade.

I spoke with one of the founders, by the way his friends were also raided by the police for another reason (funny TV intrusion) and he himself wasn't raided just because he wasn't a resident anymore (though he went to prison anyways). Second co-founder is Slovak and he also heavily opposes these tracking systems.

Prime Minister wasn't there discussing with anyone, he arrived, took a selfie with Andreas (Antonopoulos) and left after a very short while ignoring everything, just a publicity stunt to weaken your enemy.

What I'm trying to say is that tracking starts with the easiest parts (salaried employees, large retailers such as supermarkets etc.), then moves to more difficult niches (taxi drivers, Airbnb etc.) and later will be used for the entire fiat system including every affiliate. That is why you must be aware of it that the data collected today (though it may seem harmless today) can be used against you in 5 or 10 years and that is something OP should always remember.

[Mattbar]

I am an affiliate from central Europe running a Ltd. company. Recently I got sick of the incredible tax and other fees taken away from my income. I decided to leave some of the income out of the accounting. Is Skrill a safe way to do it? I was doing it for 10+ years but last 2 years all went through accounting. Was there in the meanwhile any "granted any access" for national banks or states supervisors to Skrill or any other services? Any other advise?

You've posted on a publicly available forum that you intend to commit tax fraud. I would expect this would be the first piece of evidence used against you by authorities if you get caught.

[allaboutthebets]

Sure everyone of us would like to pay less tax (like Facebook and Amazon......) but it's one of those things and trying to get around it isnt worth it

[Sherlock]

The difference between CZ and SK in this case is that the Slovak version indeed CAN be used to track your personally and individually, Czech&Croatian version has more anonymization and privacy.

The data collected is insane - now it is officially used for VAT payment evasion, in the future a simple upgrade can make it a 1984-style totatarian big brother that sees everything.

And I mention it for potential situations in which the OP decides to get residency in Cyprus or Malta - however he still stays e.g. in Slovakia some time of the year. It may and will be used against him, if not now, easily in the near future.


Agreed, states are more worried whether you pay 10€ in VAT tax correctly but your 100 times higher transfers which do not go into the VAT system (payment from a Curacao company to a BVI company) are harder to do something about, even if the account is directly under your nose.

Still many countries are implementing laws for proving the origin of your assets (presumption of guilt: can't prove the source -> you're guilty).


This is an outlier case, first of all they are a non-profit and they do accounting and pay taxes. What they reject are these tracking big-brother systems (EET). The state leaves them alone because all they can prove is that there exists this small non-profit coffee shop and officially they claim they do not even sell anything, they just let visitors use a demonstrative system of using cryptocurrency to get a coffee. What should the tax office lady assigned to them do about that? That's really beyond her pay grade.

I spoke with one of the founders, by the way his friends were also raided by the police for another reason (funny TV intrusion) and he himself wasn't raided just because he wasn't a resident anymore (though he went to prison anyways). Second co-founder is Slovak and he also heavily opposes these tracking systems.

Prime Minister wasn't there discussing with anyone, he arrived, took a selfie with Andreas (Antonopoulos) and left after a very short while ignoring everything, just a publicity stunt to weaken your enemy.

What I'm trying to say is that tracking starts with the easiest parts (salaried employees, large retailers such as supermarkets etc.), then moves to more difficult niches (taxi drivers, Airbnb etc.) and later will be used for the entire fiat system including every affiliate. That is why you must be aware of it that the data collected today (though it may seem harmless today) can be used against you in 5 or 10 years and that is something OP should always remember.

What I understood the GPS in SK are used to track the vendor and not the people who are buying. Even Czech version, as version of any country where people pay with cards, can be used to track anyone at the same accuracy as the Slovakian system. And if someone pays with cash in Slovakia, they can not track him, because they do not know him. The authorities know or can estimate where the machines are. At the point of sales. Many things today CAN be used for tracking, but ARE THEY being used? With how high probability they will be used if things go wrong? And what are the penalties when things go wrong? Business is play with probabilities. People who choose 100% paths are just collecting peanuts.

You must be working with IT backend into some extent. No - it is not a simple update that can make it 1984 - it will be a difficult update from technical and law side, unless some totalitarian state comes. Indeed it will happen, but it will take some time. Until then the money saved, which can be over 50% count a lot. Imagine buying crypto with all money saved on taxes. I hear this bullshit how is important to pay everything bla bla for 20 years. In fact if I were sitting in central Europe and reported nothing, nothing would happen until now. I repeat I am testing it with my identity, I have no idea why nobody trusts me. Should I post here screenshots of my bank accounts and money sent out of EU or from Skrill directly to the bank accounts? At the same time I paid zero taxes, I even did not fill tax forms, because I am nonresident, but at the same time state does not know I am non-resident (there is no form for that). And the OP does not even want to do that! He still wants to pay some taxes and the rest he does not want to bring to the banks.

Are we talking about the real system that is in place? Not about some theories? Then I am describing how the real system works. In one sentence: do not touch the VAT and you will be good.

Another litmus paper is the Paralelni polis. It does not matter whether it is a non-profit or for profit. The laws are the same. Thanks for correction that they actually do pay the taxes incl VAT. I was not aware of it, I will investigate, but I trust you. Either way they go openly against the state and the oligarch really hates them and he is known to take revenge exactly through tax office. He did nothing to them, even when he is well aware of them (that was the point telling that he went there).

Another litmus paper is the Slovakian coowner of Paralelni Polis, who is also crossing borders that I would never cross, because he is saying in public how smart he is with his formal residency in Panama and staying in Europe way too much, he is having business and connections there. This is not how those residency tax laws work. It is not enough to be out for half a year. it is - on paper - necessary to cut the ties. On the top he is making cypherpunk interviews how state can fo, how he is out. But again. Sh1t happens. That is central Europe. In the USA I believe he would have big, big troubles.

From risk/reward standpoint it definitely pays off to cheat. No one goes to jail, the fines are not something that would liquidate someone (one even does not get conditional sentence if the fine is paid!) and the probability to be caught is minimal.

Indeed it is not wise to ask with a profile that is leading to the owner, but even that is not such big risk. Gpwa profile is not open facebook and tax office worker is not IRS investigator.

[Azureus]

You've posted on a publicly available forum that you intend to commit tax fraud. I would expect this would be the first piece of evidence used against you by authorities if you get caught.

Well to be honest he posted that he already commited it, even if 3 years ago.

(...)
Business is play with probabilities. People who choose 100% paths are just collecting peanuts.
(...)
You must be working with IT backend into some extent. No - it is not a simple update that can make it 1984 - it will be a difficult update from technical and law side, unless some totalitarian state comes. Indeed it will happen, but it will take some time. Until then the money saved, which can be over 50% count a lot. Imagine buying crypto with all money saved on taxes. I hear this bullshit how is important to pay everything bla bla for 20 years. In fact if I were sitting in central Europe and reported nothing, nothing would happen until now. I repeat I am testing it with my identity, I have no idea why nobody trusts me.

I'm not at all arguing with you Sherlock, I actually agree but I still want to warn OP because after all he posted a question in which he was worried.

And the OP does not even want to do that! He still wants to pay some taxes and the rest he does not want to bring to the banks.
(...)
In one sentence: do not touch the VAT and you will be good.

This is my biggest issue with this thread, doing it this half-ass way. Imagine two persons.

Person 1 was born in country A, lives in country B on another continent, banks in a private country C, could move to country D; could get second citizenship by heritage from country E or buy citizenship from country F. To his home country he is a homeless unknown person that doesn't own anything, for the state he may as well be dead; no kids; no wife. Possibly he had some problems with police and copyright but not with tax office.

Person 2 is a Slovak citizen who had Slovak company, then Seychelles company (btw most retarded thing you could do now), now a Maltese company. With a 30-second Google search you can find his name, his company name, birth date and his partners. He has ties to Slovakia and already had some problems with the tax office. With a simple subpoena it is possible to find out how long he spends in Slovakia and his family ties there.

Of course these two persons are purely hypothetical and do not refer to anyone in this thread.
Who do you think could get into trouble?

From risk/reward standpoint it definitely pays off to cheat. No one goes to jail, the fines are not something that would liquidate someone (one even does not get conditional sentence if the fine is paid!) and the probability to be caught is minimal.
(...)
Indeed it is not wise to ask with a profile that is leading to the owner, but even that is not such big risk. Gpwa profile is not open facebook and tax office worker is not IRS investigator.

Yes, it is true that if you show active repentance (this is a legal term btw, not a moral concept) the result will most likely be a heavy fine, possibly not even suspended sentence - not because it wouldn't be a crime but because it's not very good use of time to go to a criminal court with something that already was judged by an administrative court. Probably could be worse but still not something OP would want to go through.

To answer OP's question about Skrill reporting - no Skrill doesn't automatically report under the AEOI/CRS standard implementation because it is not a regular bank account held in your name. If you have a bank account in your name abroad (in a reporting country), it will be automatically reported to your resident country, sometimes banks even overreport and report to citizenship country just to be sure. The way out of this is to change residency and bank wisely.

If you'd be under investigation, local authorities can send an international cooperation request to the authorities (FCA) and that authority then requests data from the wallet and reports back. Of course to prove you something criminal, they'd have to prove you what specific amount comes from what activity which would be very difficult if not impossible (you receive money from a sportsbook - is that affiliate commission or your win?). So most likely it would fall under something like "unspecified undeclared income" which I assume many people have.

[CCIndex]

Well said Michael

You should be careful. What you are describing is tax fraud, and I believe that is considered a criminal activity in most if not all countries, potentially subjecting you to jail time or very serious financial penalties if you are caught. If taxes are too high in your local jurisdiction, you could consider setting up a second company in another country with a lower tax rate, and repatriating and paying taxes as it makes sense, assuming that sort of business scheme is legal in your country.

Michael

[ttt]

This is scary...
However a really valuable insight into the problem

[nwalker]

Get yourself a good accountant. He'll know how best to set you up, so you pay the minimum amount of taxes and remain legal doing so.