Setting up a company in Ireland or the UK to pay less tax (THE GUIDE)
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1/ The differences between LLP and LTD
LLP: Limited Liability Partnership
A tax-transparent or transparent company
requires two partners/shareholders to form it
LTD: Limited Company
A traditional or opaque company
requires only one shareholder to form it
2/ Irish Taxation
Corporate Tax
of 12.5 to 25% (trading/non-trading)
Capital Gains Tax
from 12.5 to 40% (investment products, insurance policies, mutual funds, etc.)
Dividend Tax
from 0 to 25%
3/ UK Taxation
Corporate Tax
25%
Capital Gains Tax
from 0 to 25%
Dividend Tax
0% below €60,000
with brackets up to 39%
4/ As a French tax resident?
With a Limited Liability Company
Corporate Tax
25%
Capital Gains Tax
from 0 to 25%
Dividend Tax
30% in France
Example for €100,000 in profits
Corporate Tax: -€25,000
Dividend Tax (on the remaining €75,000): -€22,500
Remaining Net Capital: €52,500
→ i.e., a total tax of 50%
With a Limited Liability Company
You will be taxed in France (like an EI with BNC)
Form 2047: declaration of your income
Form 2047 (2): income must also be subject to social security contributions (CSG and CRDS)
Form 2042C PRO: the amount of income must be reported, And it's the net profit that will be declared.
Form 2042C: This report is intended to declare earned income for social security contributions.
Precautions to take
Permanent establishment
Control of the company
Economic substance
5/ What strategy do I use?
A hybrid solution, with opaque or traditional companies from a tax perspective
No matter where I live, I'm not stuck in a single country:
Tax on profits: 15% or 3%
No tax on capital gains: neither on investments nor on sales
No tax on dividends: and only 5% if I'm a French tax resident
"This makes for a total tax rate of between 3% and 19%, no matter where I am in the world 😉"
1/ I pay my corporation tax of 15% or 3%
2/ I pay my dividends where I'm a tax resident
A very interesting strategy:
for French tax residents
for digital nomads
for expats
etc.
"⚠️ This is not suitable for everyone, nor for all activities"