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Author Topic: Optimal country for Microstock Business?  (Read 10257 times)

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SA

« on: August 25, 2012, 04:37 »
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« Last Edit: October 24, 2013, 06:25 by SA »


« Reply #1 on: August 25, 2012, 07:23 »
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Stock income is no different than other income.   Whatever US bracket you are in determines how much they take.  I think we just did a thread on taxes last week.  Look for it.

ShadySue

  • There is a crack in everything
« Reply #2 on: August 25, 2012, 08:20 »
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Tax is not the only consideration. Cost of living is more important, but also the availability and willingness of suitable looking models, if that's what you shoot, or marketable locations or props. It's no use living in the lowert tax, lowest cost country if you can't get saleable models, and no buyers are interested in the location. ( might be worth shooting for specialist macro agencies, but that wasn't your question.)
Plus maybe one of the high tax countries provides more social benefits like free health care (you never know) and education (if relevant) which trumps the lower tax countries.
It's never that simple. Plus everything can change: tax rates, cost of living etc.
« Last Edit: August 25, 2012, 08:42 by ShadySue »

SA

« Reply #3 on: August 25, 2012, 08:29 »
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« Last Edit: October 24, 2013, 06:32 by SA »

« Reply #4 on: August 25, 2012, 08:30 »
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Hi!

Here in sweden, about 55 % of your income goes to the government if you are a microstocker and have started your own company. So to take the step to full-time microstocker from hobbyist means 55 % of your income "is no more".

I wonder how it is in different counties around the world. Can you tell me how much of your microstock earnings that end up in your pocket after the taxes are paid? I dont wanna hear stuff like, well i can withdraw tax from the equipment that i buy, that doest give you any more money in the pocket, its just a discount on photo-stuff which is till very expensive after tax discounts  aswell.

I am particually interested in in countries like US, Australia, Thailand, Asia.

So post your country and percentage left after tax. I dont wanna hear a bunch of technical tax-terms, give a rough estimate even if it is complicated.
Poland, Hungary, Lithuania and Latvia (to name a few) have pretty low rates for both companies and individuals. In the 10-20% range for companies.

stan

    This user is banned.
« Reply #5 on: August 25, 2012, 08:51 »
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Monaco. But will you be able to afford a flat there? ;)

I'd say Cyprus is the best choice, corporate tax rate is 10%. And the costs of living are not high, lots of beautiful Mediterranean looking women and nice warm climate ( contrary to Poland, Hungary, Lithuania and Latvia for instance).

SA

« Reply #6 on: August 25, 2012, 09:43 »
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« Last Edit: October 24, 2013, 06:26 by SA »

« Reply #7 on: August 25, 2012, 10:33 »
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I already answered about the US.

velocicarpo

« Reply #8 on: August 25, 2012, 11:41 »
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Panama ;-)

« Reply #9 on: August 25, 2012, 11:50 »
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Countries in South east Asia like Malaysia, Thailand, Vietnam, Indonesia... life is at very low cost there...but you could lack of subject and Asian models photos are not selling very well.

« Reply #10 on: August 25, 2012, 13:06 »
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Maybe Equador __ if you can squeeze into their London embassy.

WarrenPrice

« Reply #11 on: August 25, 2012, 17:03 »
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Maybe Equador __ if you can squeeze into their London embassy.

 ;D

WarrenPrice

« Reply #12 on: August 25, 2012, 17:06 »
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Coming from a slightly different angle -- you should also consider what you get for those taxes.  Doesn't Swedish Taxes Cover Your Medical/Insurance costs?

other social programs?


lisafx

« Reply #13 on: August 25, 2012, 17:21 »
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Coming from a slightly different angle -- you should also consider what you get for those taxes.  Doesn't Swedish Taxes Cover Your Medical/Insurance costs?

other social programs?

^^ Great question Warren.  The answer makes a big difference. 

Purely from a tax standpoint,  living in the US (Florida, which has no state income tax), I am in the 28% tax bracket, but after paying self-employment tax, etc. our total federal tax burden is really in the 35% range.  However that does NOT include medical insurance, which is an additional 8-10% of my income to cover our family of 3. 

« Reply #14 on: August 25, 2012, 18:02 »
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I live in a state (Washington) which has no state income tax, but as someone filing jointly with my husband, my Federal income tax bracket is much higher (36% on earned income) because of his earnings. Anything I purchase for props or equipment is subject to sales tax of 8.6% (and that varies state by state; New Hampshire's "good" in that regard with no state income tax or sales tax). I also have to pay the employer share of social security and medicare taxes (employees pay half, employers the other half).

So if I divorced my husband and moved to the Cayman Islands (tax haven) I could have lots of exotic beach pictures and no taxes. My only burden would be buying lots of sun block :)

« Reply #15 on: August 25, 2012, 21:05 »
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Doest anyone know USA and Australia in this matter?


Australia is great for microstock! (as presumably that means you are not earning a high income!)

There is an entrepreneurs tax offset that (from memory) is shaped between 25 and 50k - if you earn 0-50k it applies an offset on any tax you are due to pay: up to about 30k it can write it out completely.

if you are sole trading and so paying tax as an individual then income tax is stepped (a bit like the uk) and again if your income is modest it means a low tax burden:

0 - $18,200 =Nil
$18,201 - $37,000 19c for each $1 over $18,200
$37,001 - $80,000 $3,572 plus 32.5c for each $1 over $37,000
$80,001 - $180,000 $17,547 plus 37c for each $1 over $80,000
$180,001 and over $54,547 plus 45c for each $1 over $180,000

there is a 1.5% medicare levy unless you have private healthcare and 10% on almost all purchases via GST (business can claim that back)
to compare with the UK there are no separate National insurance contributions to pay.

for small business there are also simplified rules for writing off purchases in the first year without the need to track them as assets and value them each year.

compared to when I ran a business in the UK, Australias tax system seems to be a lot simpler for 'simple businesses'


« Reply #16 on: August 26, 2012, 00:48 »
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Belgium is considered as a country with very high taxes (average is I think around 38% income tax, excluding VAT and other taxes).  Income tax applies to all income from commissioned photography (like portraits) but NOT to income from stock photography.   Stock income is 15% on every euro you earn above 10.000 euros, so it's 0 for small fish and less than 15% for the bigger ones.  More fun :  stock income is NOT added to your other income, so my commissioned photography work falls in the lower bracket(s) of about 20%. 
Anyone with regular income out of photography is obliged to start a business, but this has hardly any influence on the tax %, it's just more paperwork, plus you might have to / want to pay an accountant.
... AND we have the BEST chocolate in the world  :)


« Reply #17 on: August 26, 2012, 03:31 »
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Does anyone have info about Germany? I will read their official literature, but anecdotal reports would also help. Berlin or Munich in particular, if things vary by state/city.

velocicarpo

« Reply #18 on: August 26, 2012, 09:56 »
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Does anyone have info about Germany? I will read their official literature, but anecdotal reports would also help. Berlin or Munich in particular, if things vary by state/city.

My GF is from Germany. Berlin is amazingly cheap. Huge Apartments. Good for installing Studios. Munich is exactly the opposite. Very expensive and too little space. As far as I know, if you install a small business you pay only the income tax and no monthly fee, like in many other countries. I cannot tell you how much it is so since it is dynamic. You may search on Bing or Google "Einkommenssteuer Rechner" and there should pop up various sites where you can caclulate your income tax percentage online.

« Reply #19 on: August 26, 2012, 10:01 »
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Does anyone have info about Germany? I will read their official literature, but anecdotal reports would also help. Berlin or Munich in particular, if things vary by state/city.

My GF is from Germany. Berlin is amazingly cheap. Huge Apartments. Good for installing Studios. Munich is exactly the opposite. Very expensive and too little space. As far as I know, if you install a small business you pay only the income tax and no monthly fee, like in many other countries. I cannot tell you how much it is so since it is dynamic. You may search on Bing or Google "Einkommenssteuer Rechner" and there should pop up various sites where you can caclulate your income tax percentage online.

Thats true. Munich is Germany's most expensive City. I don't know about Berlin, but i was in Cologne a month ago and it was great. The prices where quite cheap compared to Austria and the people where also very nice there.

RacePhoto

« Reply #20 on: August 26, 2012, 10:32 »
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I live in a state (Washington) which has no state income tax, but as someone filing jointly with my husband, my Federal income tax bracket is much higher (36% on earned income) because of his earnings. Anything I purchase for props or equipment is subject to sales tax of 8.6% (and that varies state by state; New Hampshire's "good" in that regard with no state income tax or sales tax). I also have to pay the employer share of social security and medicare taxes (employees pay half, employers the other half).

So if I divorced my husband and moved to the Cayman Islands (tax haven) I could have lots of exotic beach pictures and no taxes. My only burden would be buying lots of sun block :)


And you'll have a great collection of those little umbrellas that come in the cocktails?  :D

I'm happy where I am, in one of the worst states for taxes in the US. My Brother retired, LA in CA, and moved to Arkansas, all about taxes again...

A friend of mine says he will be moving to Italy in a few years. Something about national health care, cost of living and all that. Just thought I'd throw it in as another country to consider.

But other than taxes and health care, the Internet and world economy, if people are considering that they work "on the web", a person can live anywhere they want and take photos. Everyplace is optimal for sales and distribution. So if the question is actually about business, pick where you are happiest. If it's about taxes and health care, there are all kinds of variations.

I'm beginning to like the Cayman Islands, sitting on a beach, getting a tan, sipping fruit beverages, and not giving about 40% of my income to taxes, that's after state, feds, sales tax, and don't forget they tax our phones, internet service and all kinds of other things, beyond income. We pay income taxes, and then what we have left gets state tax, and whats left gets required Federal taxes for many services.

Here's a very nice chart, that shows average taxes paid by the average worker. Considering other personal factors, (Mexico and Korea are out...) New Zealand may be the winner, then a big group, including the USA, hovering right around 30%. My conclusion is, I'm fine just where I am.  8)



Source and much more on Economic, Environmental and Social Statistics.  http://miranda.sourceoecd.org/vl=54231882/cl=11/nw=1/rpsv/factbook2009/10/04/02/10-04-02-g1.htm


Les

« Reply #21 on: August 27, 2012, 20:52 »
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Its amazing that these taxes differ so much in the world. I guess Sweden is one of the worst places to live for a microstocker, when it comes to economical factors at least.

That's not the whole story. What is alarming, is the fact, that microstocker's model is taxed at the same rate.

RacePhoto

« Reply #22 on: August 27, 2012, 21:37 »
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Its amazing that these taxes differ so much in the world. I guess Sweden is one of the worst places to live for a microstocker, when it comes to economical factors at least.

That's not the whole story. What is alarming, is the fact, that microstocker's model is taxed at the same rate.

Explain please? You mean the same flat tax rate for all people? 50% is spooky enough for my taste.  :o

SA

« Reply #23 on: August 28, 2012, 04:05 »
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« Last Edit: October 24, 2013, 06:22 by SA »

stan

    This user is banned.
« Reply #24 on: August 28, 2012, 04:39 »
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Why do you even have to start a company to do MS?


 

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