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10 Dec 2000, Poland

Hello !

I have few questions. I am running an Internet advertising company.

The company works in this way : I have advertisers, they send me cheques in US$ for advertising campaigns. I buy advertising space from webmasters and I pay them for placing advertisements on their sites. I send them cheques in US$. The main problem is that this activity doesn't need signed contracts, invoices etc; just getting and sending cheques.

Other problem is tax.

I can deduct from income servics costs, network administration and so on. Because I have invoices, these expenses are clear. But if I haven't got invoices from webmasters it is hard here to deduct those costs from income. It looks like my income is much larger than it really is and that I need to pay tax on all the money I get from advertisers, even the 90% I need to pay to webmasters.

I would like to pay taxes on money I really earn, not on all money I Get from advertisers.

I live in Poland, and I don't think we have good environment here to run this kind of business.

Can you suggest where to run this company in Europe?

Maybe I can find reliable outsourcing services to handle for me all accountancy and run this company in another country?

Regards

Jack

Dear Jack:

Frankly, the real problem is that you are not getting any invoices or receipts from your webmaster suppliers (indeed, they may be taking advantage of this by not declaring their income, from you, to the tax collector!). You need those invoices to prove those expenses and you need to start demanding them from your suppliers. Otherwise, you will have the same problem no matter where you do business.

I always hate it when someone asks which is the best country in Europe to do business. They are all terrific. And they all have advantages and disadvantages depending on the kind of business you are doing, your long term plans, etc. I think you need to make a list of countries where you'd like to live, and another list of your business criteria and start researching.

In any event, I do suggest you talk to an accountant to help get you sorted out on taxes. She could probably also help you with preparing invoices, bookkeeping, etc.

Good luck,

Dr. Ecommerce