[yeureka]

It could be much better if the tax system was sane.

Let's say you want to do some freelance work for someone. In Portugal you have to register your service ("abrir actividade") and use an oficial invoice booklet provided by the government ("recibos verdes") to invoice your customers. You need to pay a substantial amount of social security and income tax ( a designer friend was making around €1000 a month and paying almost €500 per month in taxes ), and if you stop trading and forget to tell the government, even if you have zero income you need to pay the minimum social security ( around €60 per month ) just to be registered as a service provider.

Basically, you are taxed pre-emptively wether you make any money or not. This stops a lot people from even trying to sell their services as freelancers, let alone start a company ( can't imagine the tax labyrinth that must be ). Sometimes I want to hire a friend for a small gig and they refuse because they can't afford the social security bill incurred in being a registered service provider.

This is killing the formal economy, stifling entrepreneurship, and it's also driving more and more people to informal contracts with cash transactions that deprive the state of needed income. I won't even talk about the crazy income tax band system we have...

[collyw]

This sounds similar to Spain. I would like try out a few (small scale) business ideas, but the taxation system means that I will have to be fairly sure of a profit before I can start working, otherwise it could be a lot of wasted money just to see if things work or not.