DLS Dubai - Company Formation & Bank Account
Aston & Williams Offshore Company, Trust and Bank
Gift Card Payment gateway
Turner Little - Company Formation Agents

Beware, governments now exchange tax info via MCAA, AEOI and CRS

CALL US ON +971 50 4467827 - TO SETUP YOUR NON-CRS COMPANY STRUCTURE IN DUBAI.

Flycatcher

Active Member
Didn't see this mentioned around here, thought I'd put this up.

What's important to know when planning your tax structure are the recent agreements and protocols concerning automatic tax information:https://www.oecd.org/ctp/exchange-of-tax-information/MCAA-Signatories.pdf

In short, the signatory countries, of which there are over 101, start to automatically exchange tax information about their bank clients with each other. Half of them start from September 2017, and the rest of them start on September 2018.

There are some significant absences, for instance, the USA did not sign the MCAA nor the AEOI (they believe their own FATCA is sufficient). Singapore also does not exist in these documents (but good luck getting a bank account in there without loads of cash). It's also worth remembering that anything can happen and even these two can join the bandwagon.

Lots of underdeveloped countries are also missing, but always understand the risks when doing banking with any of those.

So whatever you plan to do, if you establish an offshore bank in any of the signatory countries. The UK's HMRC claims that your following personal details could be exchanged, expect this to be so:
  • Your full name
  • Your address (probably the current one)
  • Date of birth
  • Place of birth (just imagine)
  • "Tax identification number" (varies by countries)
  • Your account number (likely your bank account number)
  • The name and identifying number of the account provider (I have no idea what this specifically means, but my guess would be that this refers to numbered bank accounts e.g. those in Switzerland)
  • "Your account balance (or value) including interest and dividends, at the end of the calendar year (or other appropriate period)" (basically all your money)
This practically kills any sort of privacy against governments you hoped to get.

What can be done?

The internet is already popping up with "CRS loopholes". I found this one site which details at least 9 weaknesses in the standard.

Probably the easiest "loophole" to utilize is to take up domicile in a country which does not participate in the schemes, again, as long as you assume all the risks by doing so.

I've heard unverified claims that the automatic information exchange happens only after a minimum sum, but I couldn't quickly find sources detailing so.

I've also yet to find any references to precious metals, this might interest those who are interested in storing wealth in the form of gold.

Bitcoin is also relevant here, because I think it's unlikely that any sort of tax info exchange procedure could be imposed on a decentralized cryptocurrency system.

In overall I think that these agreements are a major privacy violations, which were crafted because most countries need tax income. One of the key reasons I want to operate offshore is to get privacy from governments, because I don't want authorities I don't necessarily trust to know everything about me. Even for this complicated problem, I'm hopeful for an eventual solution.
 

negon

hannibal the cannibal
BANNED MEMBER
WoW great research you did there, respect!! So if I read you right you mean BITCoin, precious metals and second cisticenship are the only possible 3 solutions there are for now.

Residence planning:
Fictitious tax residence certificates issued by non taxed countries, or customers with multi-jurisdiction residences certifying only territorial tax place of residence.

Solution: Deeming all previous residence within the last ten years as indicia of current residence. Incorrect deemed residencies can be cured with documentation such as tax clearance certificate.
This is cool, but it requires one to give up his current citinzenship and buy a new one for aprox $24k if it is Guatemala at least.

What do you think about to have a Trust and Trustee to manage all your money, for instant how are Trust accounts affected from all the agreements you think?
 

Flycatcher

Active Member
are the only possible 3 solutions there are for now.

Three solutions I could think of. There is no limit on being creative, and on matters offshore it's especially important to be so. Besides, the time everyone knows the loophole, the governments are already on to catch them, only those who kept the secrets hidden remain more safe.

Citizenship is not necessary unless you need to renunciate your current one. All you need is to have a legal domicile somewhere else, and that can be easily accomplished in several offshore countries if you have the money to rent an apartment.

This is cool, but it requires one to give up his current citinzenship and buy a new one for aprox $24k if it is Guatemala at least.

That's mainly for Americans, and also for a handful of other countries (including some European countries). Most of the developed nations have a residency based taxation. Be sure to be domiciled elsewhere, and don't spend too much time in one European country, and you can legally avoid being taxed. It's old school but incredibly it still works.

What do you think about to have a Trust and Trustee to manage all your money, for instant how are Trust accounts affected from all the agreements you think?

Obligatory disclaimer that I have very little experience in trusts.

These agreements give new tools for the governments. After the implementation, anyone with proper access rights could request bank account information. All it needs for them to get you info is if the bank reports those. If you manage to open up an account without ever providing your details, and that your trust is located in other country than the bank, I'm not sure how could they get your information. This doesn't apply if you are suspected for money laundering etc.

It's also a legal question on what is taxable income. Even having cash in an IBC varies by countries on whether it's already personal property. I see it's unlikely that trust assets would be seen as personal, especially if the trust mission is not public. You could claim the trust doesn't allow you to access its assets.

Really complex topics requiring tax and legal expertise, after all.
 
Fast Offshore - Company Formations Since 1998

Latest Threads

DLS Dubai Company Formation and banking solution
Top