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AB and tax

Corporate tax when there's no funds

xiqual
post 11.Jul.2018, 05:01 PM
Post #1
Joined: 11.Jul.2018

Hi guys,

I have a quick question, hopefully someone will be able to answer it for me.

So I've started my own AB company somewhere around September 2017. Am not sure if it was a good idea to go with AB straight away or not but I have to stick with what I have now.

So I am trying to do taxes on my own. Yeah, I'm nuts. But bear with me please.

So my little AB started in 2017. And I remember I set to pay 0 monthly taxes since I was not able to predict my monthly income that is heavily dependant upon the projects I am able to find and to work on.

And I remember I said not to hand in yearly taxes in 2017 but to do them all together with the ones in 2018. So my financial year ends on Dec 31 2018.

Please forgive my layman terminology!

Ok, so far so good, I've been doing projects, taking out salaries and stuff, etc etc. Everything seemed to work out for me.

Now I got a chance to work on a bigger project for which I will need a help that should come from 3rd parties. In other words, I need to get the assistance of some contractors and freelancers since I'm not skillful with all the areas that are part of the project.

So I have found some freelancers who agreed to do the POC for some parts of the project and they will need about 4 months of work. Once I get the POC I can only then start working on the rest of the project, adding and building my stuff on top of that POC.

So they've said their price - monthly fees they demand in order to finish everything in the suggested time frame of 4 months.

And I've made some calculations - if I do not engage any other project during these 4 months, I won't be getting any new funds into my company. I have money to still pay me salaries during that time and to pay these guys for the POC they will deliver.

But by paying out my salary and the fees for these freelancers I might end up with no funds left in my company at the time I need to close my financial year and hand in the taxes.

So how much my corporate tax will be in this case, if my company will have close to 0 sek in company bank account?

If I get that right, I am paying 22% in Corporate tax from what's left once all the salaries and fees are paid out, right?

So what worries me now is that if there are no funds left to pay the taxes from, I will have to use my personal savings to transfer needed funds in order to pay the taxes, right? Or am I going to pay taxes on what's left on that account (again, it will be close to 0). Or should I give up on paying me out salaries so that I could save some money on that bank account?

Or am I completely on the wrong track here?

I apologize for the layman terminology used but I sincerely hope I was able to describe what position I might find myself in and that I have given enough details on how my company got set up etc.

Thanks in advance!

ps. I'm in Stockholm, so if anyone has a recommendation for an accountant whom I can ask the same set of questions, please do recommend, as I am open to anything to get this resolved.
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Cheeseroller
post 11.Jul.2018, 08:31 PM
Post #2
Location: Germany
Joined: 10.Apr.2007

Contact www.mtrevision.se
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ChocOwl
post 11.Jul.2018, 10:24 PM
Post #3
Joined: 17.Jan.2011

QUOTE (xiqual @ 11.Jul.2018, 06:01 PM) *
So how much my corporate tax will be in this case, if my company will have close to 0 sek in company bank account?If I get that right, I am paying 22% in Corporate tax from wh ... (show full quote)

You pay tax on the profit, which is not really the same thing as your bank account balance.
Have you looked at verksamt.se? see eg https://www.verksamt.se/en/web/international/faq#taxes
Also, if you have used more than 50% of the original share capital you have to do something, like report it or something (not sure really what). Is this your situation? I mean, if your share capital is in your bank account and the balance is zero you have a problem.

Kudos for doing your taxes yourself, but it sounds like you need some help. You can talk to the tax office folks (I usually do this by email so I have a written record of the discussion). There are otherwise various municipal etc offices to help small businesses, particularly newly started businesses. Have you made contact with any of these? You can often get some free advice on how to start/run your business, though perhaps not for tricky tax questions.
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xiqual
post 12.Jul.2018, 07:30 AM
Post #4
Joined: 11.Jul.2018

Oh thanks for the heads up @ChocOwl! I completely forgot about the rules around the share capital!
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