# Double taxation treaty



## Rico16 (Feb 4, 2013)

Hello there Expats!

I am planning to create an online business in country XX but live in county YY (sorry for the lack of creativity) but my main point is: where should I pay the taxes of my business income? In the country where the company is registered or where I live?

Another question concerns the social contributions: should I pay them where I settle the business or where I live?

Thanks a million, regards
Rico


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## Bevdeforges (Nov 16, 2007)

Since this is a generic question, I've moved it over to the Expat Tax section.

And, the answer is "it depends." (Handy answer - applies to most everything these days.) You've got a number of factors here to consider. First of all is the country in which you are resident - and "tax resident" is defined a little bit differently in each country these days.

Then, there is the issue of what sort of business you are planning on setting up. To do business in some countries, you may have to register - whether the company or a "branch" of the company or some other sort of business entity - and "doing business in" may be defined a bit differently depending on where you want to set up.

Working in a country is generally defined as being physically present in the country while doing whatever it is you do to make a living, and that will determine where you register for and pay your social insurances, tempered by the fact of your "tax residence."

So, clear as mud? Yeah, well, we're talking about taxes. (Sorry, couldn't resist.) But it really does depend on the facts and circumstances of the particular situation (as so many tax authorities seem to be fond of saying).
Cheers,
Bev


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## Rico16 (Feb 4, 2013)

Hi there Bev, thanks a lot for your reply.

I know, it is not easy and very up to the sky issue here 

The idea is to set up a company with a virtual office (a registered address) in country XX where I would pay all the taxes and live in country YY.

The business is related to translations/interpreting and languages in general so it can be done anywhere.

What do you advice now?
Thanks
Rico


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## Bevdeforges (Nov 16, 2007)

It really will depend on the country or countries you select. Some countries require that, in order to register a company there, there must be a responsible person (managing director or similar title) who is resident in the country. And if you set yourself up to be an employee of the company, then you may have to be paid based on where you are resident.

Also depends on just how you register your business. There are types of company registration where the earnings of the company flow through directly to the owner and then are paid as part of the owner's taxes (again, based on where the owner is resident). Other types of companies are considered legal persons and pay their own taxes.
Cheers,
Bev


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