I think the best option is to move to a country with lower taxes.  I remember someone did mention setting up a company and routing their taxes through it, but then they had other expenses and there was always the risk of something not being done correctly, causing a lot of trouble.  They soon went back to the safer option.

Just Google "Panama Papers" and you can see how it can all go wrong.

But how would that work, in practice? When you register on Shutterstock, you register as an individual, with your ID, as far as I can remember. So you'd need to receive the shutterstock payment on your paypal/skrill, and transfer it from there to the account in Panama/xyz?

How are tax treaties handled? My country has an agreement about double taxation, so I don't lose the 30% of my sales in the US. What about tax havens?

But how would that work, in practice? When you register on Shutterstock, you register as an individual, with your ID, as far as I can remember. So you'd need to receive the shutterstock payment on your paypal/skrill, and transfer it from there to the account in Panama/xyz?

How are tax treaties handled? My country has an agreement about double taxation, so I don't lose the 30% of my sales in the US. What about tax havens?

Well, you form a company, get registered, you would have to travel there, open a bank account (takes some weeks or even month), register a skrill acc or paypal acc with a bank account in the us, register with SS (they have lots of companies and will let you know which docs they need),..... Panama is not so recommendable since it remains independent and does not follow the usual OECD BS which pressures other countries. In consequence every now and then the powers in charge start a campaign against the country.

Singapore is expensive when it comes to maintenance and installment. HK is good but Bank accounts are difficult. Look for a jurisdiction which give you the possibility of a paypal account (e.g. HK, Panama with a US bank account, etc.) Paypal does not work with many offshore jurisdictions.

Regarding honesty: you should really work and have your office where your company is. If you pay out Profits you should pay the corresponding dividend tax in your country of residence. This way you are 100% legal.

I've been doing some investigation into this as I also don't like paying high taxes in corrupted country either. My outcome was: It is possible to do microstock through offshore company, BUT it requires additional administrative work, lot of research into legislations, accounting standarts, etc. Your connection to offshore company may also spark a reason for tax audit in your home country. It might be good for large companies that can pay accountants and lawyers to do all the admin, not good for a photographer who has to do everything on its own. Therefore I decided: Instead of diving into the world of offshore business that you know nothing about, focus on what you already know - sell more images

Quote from: Tror on April 05, 2016, 11:03

Well, you form a company, get registered, you would have to travel there, open a bank account (takes some weeks or even month), register a skrill acc or paypal acc with a bank account in the us, register with SS (they have lots of companies and will let you know which docs they need),..... Panama is not so recommendable since it remains independent and does not follow the usual OECD BS which pressures other countries. In consequence every now and then the powers in charge start a campaign against the country.

Singapore is expensive when it comes to maintenance and installment. HK is good but Bank accounts are difficult. Look for a jurisdiction which give you the possibility of a paypal account (e.g. HK, Panama with a US bank account, etc.) Paypal does not work with many offshore jurisdictions.

Regarding honesty: you should really work and have your office where your company is. If you pay out Profits you should pay the corresponding dividend tax in your country of residence. This way you are 100% legal.

So my current registration would be invalid, and I'd need to re-register and re-upload all of my files? That would be quite bad, as some of my files have a very nice ranking, also my account on Fotolia is highly ranked, so starting from scratch does not seem like a good idea.

I don't think that I can get a US bank account - I'm not a US citizen (live in the EU).  Why do you think PayPal is needed - Skrill is an option for most of the agencies? Also, how would I pay myself? I'd be the only person employed, the director, but I guess I can't just take any amount of money from the company's account like it's mine. Sorry if this sounds confusing, I unfortunately have no idea about the world of tax, companies, etc.

And honesty... well honestly, I see 2 options: 1) give 50%+ to the country 2) find an alternative solution which I find more fair

Quote from: Harvepino on April 05, 2016, 11:48

I've been doing some investigation into this as I also don't like paying high taxes in corrupted country either. My outcome was: It is possible to do microstock through offshore company, BUT it requires additional administrative work, lot of research into legislations, accounting standarts, etc. Your connection to offshore company may also spark a reason for tax audit in your home country. It might be good for large companies that can pay accountants and lawyers to do all the admin, not good for a photographer who has to do everything on its own. Therefore I decided: Instead of diving into the world of offshore business that you know nothing about, focus on what you already know - sell more images

I've just read about a different scheme. You create a company in your country and use it for microstock. You ALSO create an offshore company which does some "work" for your company (marketing, consultations, ...) and that offshore company charges your company x amount of money. Since you spent this x amount, you deduct it from your taxes in your home country, and then just pick up the cash in the country where you have the offshore company opened.

Not sure how legal/borderline legal/illegal/grey area this is, maybe someone else will. But it does seem like a simple plan to reduce the tax.

The tax authorities allow big corporations to do things like that but do you know any individuals that have been doing it successfully for a number of years without getting in to trouble?  There might be safety in numbers, this is worth a read. http://www.independent.co.uk/news/uk/crickhowell-welsh-town-moves-offshore-to-avoid-tax-on-local-business-a6728971.html

Also I believe the company in Panama that had the info leaked is one of the top companies for crooks amd the wealthy to use for setting up offshore companies.  They weren't necessarily setting up companies in Panama but in tax havens wherever was appropriate for hiding money.

The tax authorities allow big corporations to do things like that but do you know any individuals that have been doing it successfully for a number of years without getting in to trouble?

I know at least 6 people maintaining their tax affairs in third country companies. Just one in Stock, the others are SEO, Coders, perpetual travellers, WebDesign freelancers working over elance etc.

Again, you do not get into trouble if you have a clean construction and declare everything according to your country of residence laws and the incorporation countries laws. Furthermore, you should e.g. not work in your home country and then tunnel the declaration through the company in another country = that would be e.g. fraud. Check your local laws for the details. But you can incorporate and work in whatever country you like as long as you declare the profits (if any) . For some it is not even necessary to have a country of residence (perpetual traveller). Definitely f**k*ed are the folks from the USA = they are taxed by citizenship, not by residence.....

Cool, all very useful info! Do you know some companies which offer advice and/or guidance to make sure that all the regulations are being met, no laws broken, etc.? I'd just find it easier if I paid someone who was a lot of experience in the field to guide me to the process, than try it by myself and potentially botch something.

First and foremost you have to consult a tax consultant / lawyer in your home country. I do not know where you come from and most likely cannot help you there neither. And please take your time understanding the details. Many firms who offer incorporations just wanna sell. Then you have to check your conditions and which jurisdiction for incorporation is suitable for you and the double tax treaties etc. As I see you come from EU? Have you checked Cyprus, Malta, Gibraltar, Estonia? Some nice possibilities there.....in Cyprus e.g. Royalties and IP profits are widely tax free or minimally taxed. Gibraltar and Malta have the territorial concept of taxation - anything done and earned abroad is tax free as long as it is not remitted to the country. Estonia has a 20% taxation, but only when you cash out dividends. If you leave the profits in the companies accounts it is tax free and can be saved up for investments. If you look towards HongKong it gets even more interesting :-)

If you are just an individual the most likely problem will be that you have to show that the work is done from abroad - where your company is. That is not always needed or demanded, but if you wanna be 1000% legal than it should be done this way. If you just sit in your apartment like before and simply change the skrill email to the company one as well as the account data, your local government would see this as tax avoidance or fraud since you still work in your country. This is the imho the problem you have to face in your particular Situation based on what i know - but also depends on local legislation. As someone else mentioned, two companies - one local where the work is done and one abroad for invoicing - is a nice construction, but will cost you about 5000 on maintenance a year at least....

Great for travel photographers! They can easily show that the work is not done in their countries of residence

But really, check with your local laws! No consultant abroad can relieve you from understanding the situation locally. Some people I know even asked the local tax offices directly regarding their situation. Then settle for a jurisdiction and in some I can recommend firms who help with that (HongKong for example)....

  Pick and choose! 
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