swa66 - 9:55 pm on Mar 26, 2013 (gmt 0)
What if that relative is not a resident, does not live there, and has a bank account in that country? Or say you cross the border and open an account in Switzerland, and start receiving adsense payments on your Swiss account. Are those earnings still taxable in France or Belgium?
Foreign accounts need to be declared out here - and they get extra special attention from the taxman. If you cannot justify the source of the income - it's quickly presumed to be illegal gains. You're now opening the door for fraud accusations. And no even the Swiss do not have eternal foolproof privacy.
Moreover if you try to bring the money back to use it, you're likely to attract attention and get caught.
Gambling with the liabilities of relative to evade taxes - I find it not done. Even if the relative is too trusting to let you do it, it's morally and ethically wrong.
Having a resident in another country than you as recipient: Google will not allow you to enter it - you need to have them make their own adsense account - remember you cannot change countries on an adsense account. And those recipients are now taxable in their own country.
Adsense is plain and simple income. Just pay taxes. If you're unhappy with your local taxes then move to e.g. Monaco (-unless you're French- that means no income tax) or any other tax paradise. There's a drawback: you'll have to (be able to afford to) live there (most of the year).
So unless you have a relative in such a place, and want to make them even richer than they already are: forget about it.
Declare the income, pay your taxes. If you're unsure about how to do it: talk to an accountant. If you're in the EU and they have questions regarding VAT: you're contracting with Google Ireland and it's one of the exceptions where you do not collect VAT if you're VAT registered if you're outside of Ireland - inside Ireland it's trivial: you have to collect VAT as usual and google has a special way to interact with the Irish publishers: [support.google.com...]
The rest: stop worrying over it, it's simple.
I'd avoid to take on adsense payments in a self-employed status - taxes are too high out here to do that - but it depends on the income level you're at.
Taking them in as a private person is the worst idea you can have and you're more than likely breaking the law.
So that leaves as best option to start a small company and letting that company handle all your costs (computers, hosting, internet, tools you need, bandwidth, marketing, ...) as well as the associated income (adsense, affiliate sales, ...). Obviously you need to make sure you have enough income to justify the structure and overhead - switch back to the self employed status if you can't justify the overhead for the income involved.