CFC rules if I live...

Alexm

Active Member
Hello everyone!
Which are the countries who don’t apply the CFC rules? I tried to search online,but I am struggling understanding, I don t understand if these rules apply only for the companies who open another’s companies outside of it a jurisdiction, or it applies to persons how open a company in a foreign country!
 

blockchain4ever

Building Trust
Entrepreneur
CFC rules are typically transitive, i.e. they work through a chain of ownership or control. As the rules are transitive, they can apply both to a company that owns a foreign company, but also the shareholders of the company that owns a foreign company, and also persons that directly own the foreign company.
 

dissident

Member
CFC is a totally fear-driven regulation that the fucking collectivist governments introduced to create a regulation ambiguity to fuck up anyone they want that triggers suspicious activity (don't forget that all governments in developed countries are in a strong degree collectivist as they always want to steal as much money from you).

It's quite difficult to understand how CFC rules may apply to individuals owning foreign companies. It's something relatively new that many tax lawyers didn't even know yet or cannot properly assist with a plan.
 

Alexm

Active Member
So, if you have a company outside of your home border, and you think everything it s ok, you could go in trouble if the authority want to?!?
 

Konstanz

Member
For example, Cyprus does not apply CFC for individuals, only for corporates apply. United Arab Emirates does not have any CFC rulings.
You should also consider not to trigger permanent establishment rulings.
 

dissident

Member
So, if you have a company outside of your home border, and you think everything it s ok, you could go in trouble if the authority want to?!?
It's not that easy. If you are tax resident as individual level in a country and you have more than 20% as shareholder of a foreign company, you might technically be in risk over time, but again, it's not that simple and the alert will not be triggered automagically by this rule, but because you move and declare dividends profit from a foreign company to local tax authorities in your annual tax report, which may eventually, if certain criteria matches, plug the red flag and they might investigate things.

I have read that, generally, CFC only applies to companies with a higher business volume than $750k per year, but this might not be accurate since each country applies CFC differently, which is a mess and increases radically the uncertainty about this whole fucking shit.

Fortunately, tax authorities are not that competent yet because, you know, public sector is not driven by competitiveness, right the opposite, so things are slow, messy, complex and not smart at all.

Imagine if a company like Google or Facebook, with all its efficiency, ability to innovate and access to near real-time, constant, privileged data about you, had to be responsible of the tax department?
Well, control of money will be such efficient that almost no one will be able to skip paying taxes and lots of millions will emerge from black economy. They will also tell you, proactively, what you own in taxes with a perfect decimal precision and give you a one-step link to pay them digitally with no pain. They will also automatically fill all the forms bullshit for you, and remove all manual, messy, physical steps. They will even notice when you can optimize your taxes so you don't end up paying more than necessary. But... this is far from being real in any fucking country of this world, because, you know, you are a slave of the government, and the government is not to serve you, as in a free market will be, right the opposite.

Anyway, the ideal way to get rid of CFC bullshit is moving your ass to a jurisdiction that does not apply CFC, as mentioned before.
 

Alexm

Active Member
For example, Cyprus does not apply CFC for individuals, only for corporates apply. United Arab Emirates does not have any CFC rulings.
You should also consider not to trigger permanent establishment rulings.
If i live in Cyprus or UAE, and i have a company in a no corporate tax jurisdiction, what has to do the Permanent establishment in this scenario? I don-t get it, am i missing something?
 
Top