A little blog for a restless mind

How Not to Live on the Brink of Poverty in Slovenia

First, it pays off to have children late in your life. Remember, two things: have them, and have them late.
To have them because soon this fact could directly affect the amount of pension: the government thinks about introducing a special tax on pension for those without children. You see, there is currently a shortage of 260,000 children in Slovenia in order to just maintain the current percentage of the working population. So the government thinks that, well, if you don't appreciate everything this country is doing for you, and raise a kid (or, in Minister Drobnič's own words: breed a taxpayer) or (at least) two, then you should be punished. When you're old and grumpy and without the power to do anything about it.
To have them late in your life just because it's the most profitable way. First you have to take care of yourself, and that takes time. The country will support your kids only with some change that doesn't even pay for a couple of shoes a year. The only exception are tax benefits, but this is not really a good way to do it: those with most children are typically those with lowest income and so can't do shit with tax benefits because they can't apply them in whole (the tax benefits are greater than their whole income). Therefore you have to attain a high position in a company to have a great salary and only then can you actually afford to have a kid. If you don't, well, tough luck. Go abroad. I fancy Scandinavian countries.
So we come to the second point. Be successful in company wellbeing sense, but don't be too successful in business sense. Success is a giant magnet for tax inspectors. If you or your company is so successful that you or the company win various prizes, then that means only trouble. For tax inspectors this is like shit to flies. They literally dive their noses in it. And once it is known you or the company is having tax inspectors going through the papers, the reputation plummets. And they will always find something, even if something super-micro small, made by mistake or in (your) wrong belief. They have to, they are the tax inspectors, they are paid to do it!
Don't have a salary of more than 400,000.00 SIT gross. It costs too much. Beyond that the personal income tax reaches 50%. Plus there are additional taxes, for you and the company, like the tax on wages.
Form a company in Switzerland. You don't have to be alone - find some friends and do it together. The more the merrier (= less costly for everyone). Funnel your earnings through that company. Let it be seen as if this Swiss company did services for the company you work in. The key is for the most of the money to remain in this Swiss company and you getting only some smallish amount not worth debating over. Be careful, it has to be some reasonable minimum amount for the work you're doing or again you could get some tax inspectors behind your neck. And I already explained how unreasonably awful they are. Even if you did everything legal. They can just invent some arbitrary amounts of what anything is worth and there's nothing you can do about it. Then you have to pay taxes of their perception of what you made, not of what you actually made.
Use your Swiss company to buy you everything you need. Well, not literally everything, like food, just big things: a house, a car (licenced in Switzerland, of course), furniture (except for bed, the law says you have to buy that one yourself), etc.
Also use Cayman islands (and other tax havens) for transactions. The more indirections, the merrier and legal.
Don't count on pension. Chances are that when you're retired the amount will be so small you won't be able to pay for a chewing gum. Invest. Or have your Swiss company to do it. Company pension plan comes to mind.
And forget about Slovenia. You paid enough taxes already to cover all its expenses with your youth, as it likes to blabber about. ("It's not fair! This country paid an awful lot to raise you, and now you're avoiding your taxes. This is effectively an act of treason!"). Slovenia is simply so damn expensive that you just have to work around it in order to live in prosperity.
Remember, the state is just like a company with exceptional privileges, effectively a monopoly. That makes it your enemy. It was never, it is never, and never will be your friend. It requires you to survive, not the other way around. There is yet to be invented a system where a state and an individual can live in symbiosis.

posted by AlesS @ 4/25/2006 02:16:00 PM