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  • #24,281
  • Oct 17, 2023 4:25pm Oct 17, 2023 4:25pm
Quoting TrAndy1
{quote} Not possible, it is self employed income as you are independent contractor of the prop firm. As self employed you pay sales tax. There are no exceptions here in Germany regarding Financial Services.
In Finland there is no sales tax on financial services and the income generated is in reality revenue share so I would just declare them as trading profits (capital gains).
  • #24,282
  • Oct 17, 2023 4:29pm Oct 17, 2023 4:29pm
Quoting AaronPriest
{quote} I know, hence why I specified "here in the US" for the rest of my paragraph. But "sales tax" is generally only when purchasing a good or service, not typical of declaring your income, in pretty much any country. I'm no expert on tax law in every country though. Just seems odd it would trigger a sales tax event on prop firm income. I'd expect it to be an income tax of some sort instead. EDIT: That begs a good question though... if you are an independent contractor, and your client is a prop firm, are you required to charge them a sales tax...
The prevalent VAT rate in Germany stands at 19%. A lower VAT rate of 7% is applicable to certain goods and services. Meanwhile, some services, like banking, health, and social work, are exempt from VAT.
  • #24,283
  • Edited Oct 18, 2023 7:38am Oct 17, 2023 4:35pm | Edited Oct 18, 2023 7:38am
The password from the archive is 1234
First of all, study the instructions
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  • #24,284
  • Oct 17, 2023 4:42pm Oct 17, 2023 4:42pm
Quoting TraderTero
{quote} The prevalent VAT rate in Germany stands at 19%. A lower VAT rate of 7% is applicable to certain goods and services. Meanwhile, some services, like banking, health, and social work, are exempt from VAT.
You are right the turnover from securities is excempt from sales tax. It is also said that the effort from this turnover is free of sales tax. So for the profits from these turnovers they are also sales tax free ? And all the youtube and internet content I could find it is needed to declare as income taxes, though as capital gains taxes would be really cool. Any idea how you could do this ? I mean just saying that you have a revenue share on virtual profits ? You mean declaring as capital gains as self employed ? Because I think you cannot say you had as private person capital gains on a prop firm or ?. Then the problem is that if you declare capital gains as self employed you are already subject to regulators (BaFin here in Germany), because every self employed would need a kind of license first before it could have capital gains. That would cause a lot of problems. Did you consider that too ?
  • #24,285
  • Oct 17, 2023 5:05pm Oct 17, 2023 5:05pm
Quoting AaronPriest
{quote} I know, hence why I specified "here in the US" for the rest of my paragraph. But "sales tax" is generally only when purchasing a good or service, not typical of declaring your income, in pretty much any country. I'm no expert on tax law in every country though. Just seems odd it would trigger a sales tax event on prop firm income. I'd expect it to be an income tax of some sort instead. EDIT: That begs a good question though... if you are an independent contractor, and your client is a prop firm, are you required to charge them a sales tax...
At this point, we are "lucky" to get them to pay the profit split they contractually agreed to, yeah, I doubt they are going to pay sales tax on it.
  • #24,286
  • Oct 17, 2023 5:09pm Oct 17, 2023 5:09pm
Regarding the revenue share.

I mean are the prop firms not really stupid if they say there is a standard 80% profit split ? Because it means whenever a trader is paid out it means that 20% of those profits must be taxed as revenue share for the prop firm itself. But they all do only b-booking or to 99.9% at least. So they pay taxes on challenge fees and in addition to those 20% profit split as revenue share when in fact they had no revenues to share here because they just took always the other side of trades ? That must be stupid because then the prop firms needs to pay more taxes then just offering a 100% profit split to the trader. Then they could use it as marketing tool to demand higher challenge fees because of that. That would be clear tax advantage then for the prop firm or ? So those actual profit splits of 80% is a tax disadvantage for the prop, so why are all props then doing/offering this ?
  • #24,287
  • Oct 17, 2023 6:52pm Oct 17, 2023 6:52pm
Obviously they don't declare it as revenue because they have nothing on those "simulated profits share"
Don't give up on your dreams. Keep sleeping.
  • #24,288
  • Oct 17, 2023 6:56pm Oct 17, 2023 6:56pm
Quoting TrAndy1
Just seen there is a flat tax on personal trading account gains in Spain of 19% to 23% and in Italy 12.5% tax on Forex trading gains with personal account. So the difference to self employed tax as individual is even higher here in those countries as in comparison most other EU countries the capital gains taxes on short term trading is around 25%. So it makes more sense now to just trade your own personal account here. Just do not buy NEW challenges anymore on any prop. Can anybody like @Casablanca can confirm that short term trading on Forex or...
Do you have by chance the figures for trading account gains for corporate accounts in Europe?
Don't give up on your dreams. Keep sleeping.
  • #24,289
  • Oct 17, 2023 9:43pm Oct 17, 2023 9:43pm
For Australia base what is payment options the best
Wise, wire transfer?
  • #24,290
  • Oct 18, 2023 12:36am Oct 18, 2023 12:36am
Quoting Artcool
{quote} Do you have by chance the figures for trading account gains for corporate accounts in Europe?
I see no need for that because FTMO is the only prop left where you can sign up as business entity. All the other props you cannot do that.
  • #24,291
  • Oct 18, 2023 3:11am Oct 18, 2023 3:11am
Quoting TrAndy1
{quote} You are right the turnover from securities is excempt from sales tax. It is also said that the effort from this turnover is free of sales tax. So for the profits from these turnovers they are also sales tax free ? And all the youtube and internet content I could find it is needed to declare as income taxes, though as capital gains taxes would be really cool. Any idea how you could do this ? I mean just saying that you have a revenue share on virtual profits ? You mean declaring as capital gains as self employed ? Because I think you cannot...
It's definitively a grey area but being a independent contractor is not the key issue here as this is just made because prop firms want to make sure that they will have no tax liabilities. In Finland the regulators and tax authorities work separately so I don't see regulation being a concern. The source of income is forex trading based on revenue sharing and I would also declare it as such. If that is not accepted the worst thing that can happen is that you need to pay some extra taxes. Over here you can also ask for a preliminary ruling from the authorities.
I would not claim my trading activities being self employment or any kind of employment. In any case it might be good to consult a tax expert in your country as each country in EU still has some differences in tax laws.
  • #24,292
  • Oct 18, 2023 3:15am Oct 18, 2023 3:15am
(Possible Legal) Definition of Profit Split, what is defined as profit?

There is all this conjecture about profit split, I ask what is it if we are using the words such as simulated? There is no profit and a company cannot pay itself with "simulated" profit therefore does it even exist? Or can a company indeed pay itself with the remaining split of unicorn droppings?

So we can talk about 80%/90% 110% till the cows come home can't we? Fact is it's false, fake, means nothing and probably should be called something else if they want to survive the next round of compliance.

Is this is the dumbest black hole all b booking bucket shop props have fallen into?
  • #24,293
  • Oct 18, 2023 3:28am Oct 18, 2023 3:28am
Quoting TrAndy1
Regarding the revenue share. I mean are the prop firms not really stupid if they say there is a standard 80% profit split ? Because it means whenever a trader is paid out it means that 20% of those profits must be taxed as revenue share for the prop firm itself. But they all do only b-booking or to 99.9% at least. So they pay taxes on challenge fees and in addition to those 20% profit split as revenue share when in fact they had no revenues to share here because they just took always the other side of trades ? That must be stupid because then the...
Because there is no profit split. So in your case with Bespoke do they own you the additional 20% retained from your performance? They sure as hell aren't paying the UK tax authorities on it.
  • #24,294
  • Edited 5:55am Oct 18, 2023 5:31am | Edited 5:55am
Quoting Fagin
{quote} Because there is no profit split. So in your case with Bespoke do they own you the additional 20% retained from your performance? They sure as hell aren't paying the UK tax authorities on it.
If I was the UK tax authority I would look on each prop firm its website and when there is a profit split mentioned I would use this number to fully tax the prop firm, even they would claim they had no profits because of proprietary only b-booking all trades. I mean when it is officially said on their website it would kind of misleading marketing to all their clients, so this would rule in favor of UK tax authorities. I do not think it is any easy for any prop firm to say they had no profits from their part of the profit split, when the prop firm is officially saying the opposite. It may depend on the country how the tax authorities do operate, but in the USA and UK for sure I guess they will demand their tax share on the prop firm its profit split (in addition to challenge fees as 100% revenues here).
  • #24,295
  • Oct 18, 2023 7:14am Oct 18, 2023 7:14am
Quoting TrAndy1
{quote} I see no need for that because FTMO is the only prop left where you can sign up as business entity. All the other props you cannot do that.
TFF alows corporate, The5ers allow it, FTMO, the tradingpit, VAST MAJORITY ALLOW it
  • #24,296
  • Oct 18, 2023 7:43am Oct 18, 2023 7:43am
Quoting TrAndy1
Trying a different strategy. With some €30k I trade on personal account it is like having a $400k funded after 80% profit split but in Euro as $40k max. drawdown on 80% is $32k ~ €30k. So now I have more risk I know. But I have withdrawn my first profit of €4k. I will do this after I have withdrawn the whole amount of €30k, thus leaving another €30k into this personal account. So after I flipped this account once it is then riskfree too. Another flipping then means I have the same exact $800k funded accounts then on my personal account with a balance...
That's not an alternative because the 30K that you used to fund the account cost you 30K (from previous sources), while a 40K account can cost you 2K, 4K, 6K, depending on how many 400K challenges (at a cost of 2K) you need until you get to funded.

Furthermore if you withdraw 30K profit from your account and you leave 30K there it's not a free ride. It's still your 30K.

On the positive side, in a prop you can't withdraw the 30K available DD. In your account you can withdraw at any moment.

Edit: another thing I forgot. When you lose 29K from the 30K in props you still have the whole 1:10 leverage. When you lose 29K from the 30K in you account, you get reduced to nothing. Just 1K x leverage, which is very little.
  • #24,297
  • Oct 18, 2023 7:55am Oct 18, 2023 7:55am
Quoting donfriday
{quote} cti 5ers lux surge ftuk this are the only prop firm i trust... they offer real live account
Surge CEO was caught, together with her husband, in a ponzi scheem. Search Jana Seaman.
FTUK is trailing
Lux has a very bad reputation around
  • #24,298
  • Oct 18, 2023 8:05am Oct 18, 2023 8:05am
Quoting TrAndy1
{quote} If I was the UK tax authority I would look on each prop firm its website and when there is a profit split mentioned I would use this number to fully tax the prop firm, even they would claim they had no profits because of proprietary only b-booking all trades. I mean when it is officially said on their website it would kind of misleading marketing to all their clients, so this would rule in favor of UK tax authorities. I do not think it is any easy for any prop firm to say they had no profits from their part of the profit split, when the...
I am not sure if we are talking about the same sales tax in UK. In UK, it's known as the 20% VAT. I have friends who are funded with FTMO and they live in UK. They told me FTMO charged them 20% VAT on top of the challenge fee, which will also be refunded only if the challenge has been passed. In that case, since FTMO is VAT-registered in UK, (They have to 'cause I imagine they mush have exceeded the threshold for revenue.) they won't have to pay any VAT for anything they purchase as long as it's counted as company's expense. The same reason why my friend in UK would use his dad's company card to buy an iPhone so it's essentially 20% off, more or less, as his dad's company is VAT registered.

If this is all true, FTMO won't need to pay any sales tax on the profit split (even though we all know it's not a profit split...they just term it that way....In reality, only a handful of traders got A booked.)

But that's just what I heard. Not sure if we are talking about the same sales tax.
memento mori
  • #24,299
  • Oct 18, 2023 8:06am Oct 18, 2023 8:06am
Quoting TraderTero
{quote} It's definitively a grey area but being a independent contractor is not the key issue here as this is just made because prop firms want to make sure that they will have no tax liabilities. In Finland the regulators and tax authorities work separately so I don't see regulation being a concern. The source of income is forex trading based on revenue sharing and I would also declare it as such. If that is not accepted the worst thing that can happen is that you need to pay some extra taxes. Over here you can also ask for a preliminary ruling...
The thing is that in some european countries on capital tax gain you pay a tax rate on the income and it's done. No more worries.

However, if afterwards they consider you a contractor you become an independent professional (for example consultant) and it's not just the tax difference you have to pay. You're probably liable to pay social security. Which can be a problem if they audit you only after 3 or 4 years. Missing social security for 3 or 4 years + fines + interests.
  • #24,300
  • Oct 18, 2023 8:09am Oct 18, 2023 8:09am
Quoting Capablanca
{quote} The thing is that in some european countries on capital tax gain you pay a tax rate on the income and it's done. No more worries. However, if afterwards they consider you a contractor you become an independent professional (for example consultant) and it's not just the tax difference you have to pay. You're probably liable to pay social security. Which can be a problem if they audit you only after 3 or 4 years. Missing social security for 3 or 4 years + fines + interests.
Yeah same thing in my country, if trading is your main source of income, you will not pay flat 19,6% but pay levels if make too much money can reach to 48% plus social security, thats why i opened a company
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