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Updated about 5 years ago,

User Stats

28
Posts
5
Votes
Matthew Song Loong
  • Property Manager
  • Zurich, Switzerland
5
Votes |
28
Posts

Sole trader AND llc: consequences for VAT / Sales Tax

Matthew Song Loong
  • Property Manager
  • Zurich, Switzerland
Posted

After calculating my business plan, I found out that taxation is quite killing for business.

I wanted to set up an LLC to get more capital, to get around the 45% limitation for individuals. I'll then be able to get two apartments.
What happens then is that I have one privately owned apartment (can't move to LLC due to mortgage), and an LLC with 2 apartments.

The separate "entities" (sole proprietor and LLC) generate less income than the VAT / Sales Tax threshold.
However, both entities combined will. This of course will force me to charge VAT, making my "product" less attractive etc.

I didn't intend to "disaggregate" with a company on purpose, but there may be a chance the tax office thinks differently...
Especially if I'll have to use private money to (potentially) back-stop the negative cashflow of the LLC...
Anyone any experience with being Sole trader AND having an LLC to rent out property?