The change in the method of calculation of insurance contributions and the reduction of tax rates makes it attractive -after 4 years 2016-2019 the raging of the IKE – the idea of establishing an individual or a personal business.
See a crash-test of the Accounting Office Eurotax – Τσαντήλας Athanasios & associates between legal forms with five scenarios earnings for 2020 :
(*) A summary of the results (blue the largest net amount after tax) :
* The analytical results per year you will find them here.
So how do you pick the right corporate form?
The choice of corporate form in which it will attempt someone is a combination of many factors.
- The insurance and tax burden.
- Cost management -is clearly higher in a company with διπλογραφικά books like the IKE in comparison with an individual company.
- The various costs incurred (e.x. in a private company, must be paid insurance contributions for the admin, which is not a negligible) .
- The issues on the liability of operators of the business against the law.
- Issues of "anonymity" of partners, relations between the partners, etc.
- For profit the individual business but also The.E./ E.E. with απλογραφικά (B) offer the best solution, as they leave the more clearly. For anyone who thought that the difference in atomic or The.E. / E.E. company and IKE is not great, let's take into account how much expense management and accounting support will be needed in the one, and how much in the other case, but what's the exit for the preparation and publication of a balance sheet or the "obstacle" in the movement of money, which is called the compliance fund.
- For gains > 40.000 – 50.000 euro , the person concerned must now turn to The.E./ E.E. with απλογραφικά books (B), since the latter produces better and better, albeit marginally result from IKE, LTD. AU. .
- For gains > 50.000 euro solution individual is prohibitive and should be turned to IKE, LTD., S. a. or to remain in The.E. with απλογραφικά or διπλογραφικά if exceeded 1.5 million. jiro.
As, indeed, go up the profits, the more advantageous is the solution of IKE, especially in comparison with the individual enterprise.
All of the above here in the accounting office Eurotax analyzed simple and easy to understand for the prospective entrepreneur in order to have it solved before he makes his choice . What form of interest and which are not (with a purely economic criteria and without regard to the cost of management) is a function of the amount of profits that appreciates someone that can bring the activity.
Now the vast majority of interested parties to carry on business activity will hardly turn to establishing IKE unless looking forward to very high profits from the first years of operation. Especially for earnings in the range of 10,000 – 40.000 thousand euro no real reason to set up an IKE -at least in purely economic criteria - does not exist, and the only argument that could be the anonymity, or the πολυμετοχικότητα.
- Recommendation proprietorship
The income tax, is calculated from 01/01/2020 to the new tax scale, which provides the rate of 9% for the first eur 10,000, 22% for the next 10,000 euro and rates of 28% and 36% for the next and following stop lights 10.000 euros. As for the maximum rate, has also been reduced to 44%, 45%, which was until recently. Yes, there is the prospect of a further reduction of the tax burden in 2020, as the government wants to reduce the solidarity contribution (whether or not at a rate of 30% for the profits of 2020), as well as the end of trade. The big change, of course, has to do with the fact that disconnected insurance contributions from the reported profits. This, without taken into account any reduction occurred in the subsequent years either in solidarity contribution either at the end of business.
- Recommendation The.E. or E.E.
For general partnerships and limited partnerships, the tax rate has been reduced from 29% to 24% and the benefit it will look with the version of the clearing of 2020 (p.p. as well as the reduction in respect of the profits of the 2019). These companies when special respect απλογραφικά books ( with a minimum turnover of up to 1.5 cm. euro) are exempt from tax distribution of 5% of the profits, making them very attractive compared to IKE, LTD. and AU even for gains >50.000 enough for the partners to have taken knowledge of the legal responsibility that is significantly different.
- Recommendation Of A Private Limited Liability Company.K.E.)
As regards the income tax, for the IKE is true that and for the personal companies. The tax rate is reduced to 24% . There is the additional benefit of reduction in the rate of taxation of dividends from 10% to 5%. Should this factor be taken into account, as well as the difference to reach the net profit into the pocket of partners. In terms of the insurance scheme, it doesn't change anything. That is, the partners will not pay any insurance contributions, and the only one who will bear the administrator.
CONCLUSIONS:
1: The charge for taxes and insurance contributions has been reduced for all forms of business activity. So, those who are already being tested in the business arena, you will have the benefit.
2nd: In the case of individual companies, the total benefit from the reduction of taxes and insurance contributions are much larger compared with the corresponding obtained for the IKE. That is, for a profit of 15,000 to 40,000 euros IKE to be more advantageous than the individual, now applies the other way around.
3rd: The scenery has not been fully developed. We don't pick the corporate form with a one-year horizon, as well as the conversion from format to format is costly and time-consuming case. Thus, the comparison will be more easy when you voted, and the second is a reduction in the rate of taxation of legal persons from 24% to 20%, and the abolition of the solidarity contribution, as well as of the end of business.
4th Practically, the establishment of IKE becomes even more attractive for gains >50.000, well except for the fact that nothing changes in insurance, there is the advantage of double tax reduction with the reduction of the corporate income tax rate from 29% to 24%, but the reduction in the rate of taxation of dividends from 10% to 5%.
5th Can the insurance scheme for the partners of IKE was finally unchanged , however, all of the rulers and the people in the market agree that the "wave IKE" that hit the country especially after the 2017 will blow over, as now there is no valid reason to get into trouble, someone with the high cost of maintenance and operation of a corporate form with accounting standards and compliance with c book.
And before you raped someone to disprove everything that we mention above, we note that all the scenarios is the assumption of the full distribution of profits and without fees to partners and D.P. many suggest as a "measure" of a reduction of the net profit, with questionable results, however, the regular control if not done perfectly justified and correct procedures.
The accounting office Eurotax – Τσαντήλας Athanasios and partners to Agioi Anargyroi Attica recommend the appropriate form of business after complete analysis and always in cooperation with you and your business plans.
