[xyzzy_plugh]

Right, I think that's the problem. Things get complicated so I'm not sure there's a single answer. Usually the easiest way to do things is to just declare everything as normal individual income. Dealing with corporate taxes is a whole ball game.

[moonchrome]

The difference in Croatia can be >20% of gross and it isn't much more work than reporting your individual income, the only gotcha is shutting down the legal entity takes a very long time.

[mellavora]

it often isn't so easy. In many jurisdictions, there needs to be a system to make sure the proper social taxes are paid.

In a 'normal' employment situation these are handled by the employer. As a freelancer, no. So the law requires some additional structure to make sure these taxes get paid.

If you simply declare your freelancing income as 'normal income', you are not paying these taxes, which probably makes you guilty of tax fraud.

Also, if you are freelancing, you may be required to charge sale tax or VAT or similar. In the EU, you need to be VAT registered to collect VAT. As an individual, only certain countries allow this, but only if you have a business license in that country. Otherwise you need a corporate form, or you are commiting tax fraud.

[xyzzy_plugh]

Just because you take the income personally doesn't mean you don't pay taxes or collect VAT. You absolutely do, the difference is that after the business is cconducted you pay income tax rather than a company paying a corporate tax rate. Taxes are paid in one spot, not multiple spots. It's not always the right answer, but it is definitely simpler.