Post by sinthiya007 on Nov 4, 2024 10:16:50 GMT
Today we will discuss double taxation in detail, reveal its essence and mechanism of operation. We will consider all these aspects using the example of Amazon entrepreneurs and the need to apply such aspects specifically for them.
Sooner or later, every Amazon entrepreneur comes to the point of realizing the need to register a company . A company, coupled with a bank account or a properly selected payment system, is a good tool for protecting the business, settling tax issues and, most importantly, for the rapid development of the business as a whole.
In order to better understand what double taxation is
and how it works, we suggest considering the following option:
A citizen and tax resident of Ukraine owns an Amazon account registered to a company. For example, let's take the American market and the simplest organizational and legal form of a company in the USA: LLC (Limited Liability Company), i.e. a limited liability company, for example, in Florida.
In such a situation, two possible scenarios are possible:
Option
The product is actively sold, the turnover on the account increases, the company declares income, pays taxes, and the owner of the company reinvests all earned income into the business (purchase of new batches of goods, payment to the supplier, forwarder, advertising and marketing activities).
A situation in which we can talk about double taxation occurs when the owner of an American company (for example), being a tax resident of Ukraine, decides to withdraw income in the form of dividends for personal needs.
Option 2
The situation with income is the same as in the first case, but this time the business owner decided to distribute the company's income by paying dividends to the shareholder, that is, to himself, so to speak, for personal needs.
The concept of double taxation arises precisely in Option No. 2. How exactly?
Double taxation by Ukraine
Let us return to the fact that the owner of the company is a citizen and tax resident of Ukraine, and according to the legislation of Ukraine and in accordance with Article 179 of the Tax Code of Ukraine (TC), the taxpayer is obliged to submit an annual declaration of property status and income.
This means that dividend income from an American company must be declared in the annual declaration of an individual, and tax must be paid on this income. Such tax is paid not at the rate of 18%, as stated in Article 167.1 of the Tax Code, to which everyone is accustomed, but at the rate of 9% + 1.5% military tax, which is applied according to Article 167.5.4 of the Tax Code:
“..for income in the form of dividends on shares and/or investment certificates, corporate rights accrued by non-residents , joint investment institutions and business entities that are not payers of income tax.”
Sooner or later, every Amazon entrepreneur comes to the point of realizing the need to register a company . A company, coupled with a bank account or a properly selected payment system, is a good tool for protecting the business, settling tax issues and, most importantly, for the rapid development of the business as a whole.
In order to better understand what double taxation is
and how it works, we suggest considering the following option:A citizen and tax resident of Ukraine owns an Amazon account registered to a company. For example, let's take the American market and the simplest organizational and legal form of a company in the USA: LLC (Limited Liability Company), i.e. a limited liability company, for example, in Florida.
In such a situation, two possible scenarios are possible:
Option
The product is actively sold, the turnover on the account increases, the company declares income, pays taxes, and the owner of the company reinvests all earned income into the business (purchase of new batches of goods, payment to the supplier, forwarder, advertising and marketing activities).
A situation in which we can talk about double taxation occurs when the owner of an American company (for example), being a tax resident of Ukraine, decides to withdraw income in the form of dividends for personal needs.
Option 2
The situation with income is the same as in the first case, but this time the business owner decided to distribute the company's income by paying dividends to the shareholder, that is, to himself, so to speak, for personal needs.
The concept of double taxation arises precisely in Option No. 2. How exactly?
Double taxation by Ukraine
Let us return to the fact that the owner of the company is a citizen and tax resident of Ukraine, and according to the legislation of Ukraine and in accordance with Article 179 of the Tax Code of Ukraine (TC), the taxpayer is obliged to submit an annual declaration of property status and income.
This means that dividend income from an American company must be declared in the annual declaration of an individual, and tax must be paid on this income. Such tax is paid not at the rate of 18%, as stated in Article 167.1 of the Tax Code, to which everyone is accustomed, but at the rate of 9% + 1.5% military tax, which is applied according to Article 167.5.4 of the Tax Code:
“..for income in the form of dividends on shares and/or investment certificates, corporate rights accrued by non-residents , joint investment institutions and business entities that are not payers of income tax.”