Comment by mootothemax | Hacker News Reader

Comment by mootothemax | Hacker News Reader

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Go to Poland - 19% flat income tax rate for companies - you can get flat by 400 euro / month in biggest cities and work remotely for foreign clients.

To expand on this: one can operate as a sole trader company, and enjoy the 19% flat income tax rate. You can also register your company for VAT, and then claim back the VAT on company purchases.

The only other cost is ~$270 / ~240 EUR / ~180 GBP per month in social insurance taxes.

I've been here for the last five years, and the low cost of living (very low cost outside of Warsaw) combined with low taxes makes Poland a very forgiving place to be when your first few side businesses inevitably fail.

(for that matter, the startup community here in Warsaw, centred somewhat around Reaktor - http://reaktorwarsaw.com - is really picking up steam)

If you do what I do - remote consulting for clients in the UK and USA - and you have the talent to charge western rates, you can build a sizeable nest egg in next to no time.

You know what sucks. As an American I'd still have to pay American income taxes. I cannot wrap my head around how we can say that's ok. Sure, there are ways to get around a portion of the taxes, but those involve things like never coming to the US for more than a set (short) amount of time.

No! You would not have to pay American taxes on the income you have earned while living abroad. There is the foreign income exemption which essentially says that the IRS does not care to tax the first $100,000 you earn. For taxes above that, you first deduct dollar for dollar what you have paid to the foreign tax authority. Ball-parking it, you would have to earn more than $180,000 per year to need to pay US taxes. You still have to file US taxes, which is a cost and an inconvenience, but is manageable.

Of course, you must be genuinely living abroad to apply for this. This means either spending enough time outside of the US (> 330 days in a tax year, if I recall correctly) or have enough proof that you are really living abroad (things like primary residence in your name, bills, bank accounts, mortgage, insurance, kids at school -- regular every day stuff).

Now if you want to game the system and just "kind of" live abroad in order to take advantage of the income exemption, that's a different story.

> Sure, there are ways to get around a portion of the taxes, but those involve things like never coming to the US for more than a set (short) amount of time.

I know about being an expat and how to avoid SOME of the taxes. Point is, unless you make under that limit and don't spend more than a month per year in the US, you are liable for US taxes. They give credit for foreign taxes paid, but you'll basically be paying the US income tax rates when it's all done. Not to mention the sheer stupidity of having to file in the first place.

I'd still have to pay American income taxes

On personal income. It sounds like the UK's "IR35" loophole - if you leave the money in the company you don't have to pay tax on that. So you can accumulate capital in the company.

You know what sucks. As an American I'd still have to pay American income taxes.

Agreed, it always feels scandalous to me whenever I hear this fact.

No idea how it works in practise. I known plenty of Americans who have settled in Poland for a good portion of their lives, so it must be possible to overcome the burden.

Maybe it's one of those things where, as long as you can afford to pay a good accountant (and you really should be able to afford it in Poland), they take the pain away for you?

This is false, false, false. Please everyone, if you stay out of the US for ~ 330 days a year, you are untaxed up to about 100k (changes every year). I've done this 2 years and the savings are insane. Federal income taxes are a huge drain on your salary. Go abroad!!

You're also exempt from the Obamacare penalty for not having health insurance if you're out of the country for 330+ days per year. For 2015, it's 2% of your income, and next year it will be higher.

The penalty is 0.1666% per month you didn't have qualifying health insurance for any 3+ month period(s) you didn't have it, e.g., if you didn't have insurance in the months of February-April, you'd be assessed a fine of 0.5% of your income.

How is it 'false, false, false' exactly?

I mention that there are ways to avoid some of the taxes. I've BEEN an expat so I know how it works.

I also know that I still had to pay taxes even when I stayed out of country long enough just due to income levels. Additionally, with all of my family in the US it was pretty hard to stay out of country enough to avoid taxes.

Am I saying you shouldn't move out of the country? NO! I loved living in Europe. And if you live in a low cost of living country you will save lots of money if you get a US salary or contracts. What I am saying is that as an American you'll likely end up still paying US taxes and you'll still have to file with the IRS every year.

Don't follow the rules to comply? Then you don't get the tax savings.

http://www.irs.gov/Individuals/International-Taxpayers/Forei...

Income tax, perhaps. Corporation tax, probably not?

If you can structure your work and business correctly, I'm sure you can bypass such taxes. Assuming you don't want to renounce your nationality!

> As an American I'd still have to pay American income taxes.

And as an American you would still receive the support of the US government in case of war or other disasters.

And what of all the other countries that provide 'services' for citizens living abroad that DON'T make them pay taxes? Obviously it can be done.

Or not really Shengen. But as EU citizen I don't really care. Bulgaria has 10% flat rate. Cheap cost of living also.

Or not really Shengen. But as EU citizen I don't really care. Bulgaria has 10% flat rate. Cheap cost of living also.

You have to learn the Cyrillic alphabet on top of learning a Slavic language though! I tease, I tease.

Isn't Bulgaria due to join the Schengen area pretty soon? Inside the next couple of years, at least?

  Isn't Bulgaria due to join the Schengen area pretty soon? Inside the next couple of years, at least?

It should have been included together with Romania a couple years ago.

The problem is that both countries are still considered too corrupt for inclusion into the Schengen treaty. Romania seems to have cleaned up their act better then Bulgaria, but there are still grave doubts that the countries behave according to the treaty and don't, for example, sell visas to people, who are not eligible for them.

To the best of my knowledge, both countries are still on an waiting list, but given the current anti immigrant sentiments in most of central Europe this could take a few more years minimum.

Note that I'm not singling out the countries as crooked I'm just stating facts. Organized crime, for example, is still a huge problem in Bulgaria and corruption is still a huge problem in both countries. [1]

[1] http://www.transparency.org/cpi2014/results

No need to learn. Reliable Accountant and lawyer :)

how come it's so cheap to live in poland?

how come it's so cheap to live in poland?

Off the top of my head:

- The state's still transitioning from a post-communist economy.

- Wages are very low.

- Relatively high emigration rate "brain drain" (although people are starting to return).

- More supply, less demand.

You can buy a brand new apartment close to the centre for somewhere around $2000 per square metre / $200 per square foot. Depending on how your housing market work, that's either scandalously high, or shockingly low.

It is however, very very affordable as soon as you start earning a reasonable wage.

There are plenty of parts of the United States with similar housing costs.

But these were the prices for a big, vibrant city. If you go to places with worse economy, it can get as low as $600 per square metre - in/near a nice historic city cente. And there are virtually no guns or organized crime in Poland, so even in poorer areas there isn't that much to be worried about in terms of security.

It's cheap if you're coming from a developed nation and are comparing local costs with what you earn there.

Remember, the average wage in Poland (according to GUS) is around $12750 yearly, so a $550/mo apartment (the average, from what I know amongst friends) in Warsaw is quite expensive for the average Pole.

So, why are wages so low? Well, we'd like to know as well :).

you can pay only 100 Euro for insurance for first 2 years(no pension contribution)

The only problem is communication with government, rather impossible without polish.

The only problem is communication with government, rather impossible without polish.

Very true - and very difficult at first, if your Polish is rather poor.

That said, my Polish was terrible, and I managed to bluster through it.

I recently helped an acquaintance through the process, and it turned out I'd done it the wrong way around. First hire a good accountant (mine costs slightly more than usual at $100/mo, thanks to processing many many many invoices/mo), sign over power of attorney for submitting tax documents, and they'll take care of the rest for you.

How are Warsaw and Krakov for families with children?

I can't speak for Kraków, as I've only had a family since being in Warsaw.

I think Warsaw's great. Plenty of green spaces, lots of child-friendly environments, and it's pretty easy - if you choose - to find yourself living in a community of similarly-aged kids where they all look out for one another.

The only downside I can think of is navigating stuff like vaccinations, doctors, and general bureaucracy. The majority you'll be fine with, but some working Polish - and having Polish friends - will be helpful as English is in short supply in some vital areas.

I guess you can do the routine stuff in private health care, where they actually care about the quality of service (so they should be able to communicate in English). It's not really expensive too; in Warsaw appointment with a specialist (cardiologist etc.) is $25-$50. For serious stuff (like surgery) it's best to go with public health care though.

I dunno, I think it's very dependent on the health provider in question. I've had some shockers from Lux Med, both in terms of incredibly bad service (eg doctors clocking off early and then claiming I turned up late, despite being obviously and easily provably false), and issues with a lack of English speakers, despite being assured that it wouldn't be a problem.

In fact, they're bad enough that I actively campaign against them.

Whoops, turned into a rant there by accident, sorry about that :)

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