even if he moves to "faraway island" and makes invoices just for the purpose of shrinking taxable income in eu country, it's still forbidden under BEPS
since both companies would be owned by same person, transfer pricing might be needed (depending on transaction types between two companies)
the invoices would actually have very strong background, and most likely this would bring attention of tax agency
do you agree with me?
This is correct.
Even by using a nominee director this will be easily pierced by tax authorities
1) you reduce profit with billing form a tax haven. What services and proof of services you can provide?
2) anything billing from a tax haven will increase exponentially the risk of having tax authorities on you
3) you try to shift 90% of the profit all of a sudden to a tax heaven entity by suddenly billing an existing company. Tax data mining notices this and another red flag to get a tax investigation.
4) as soon as things look suspicious and authorities believe they are losing tax income from a set up structure they will take action and won't stop. You office gets raided and they will contact the tax heaven which will provide all information they request under the tax exchange treaty
5) even you use a nominee director, they will get that information often from authorities (they ask who is working for this company and who makes decisions), unless that nominee agrees to take all the risk and will declare that, which nobody will do
6) any related business you received billing from in a tax heaven has to be declared with the annual report in most EU countries
Only tax advice to be given is, move to another more tax beneficial jurisdiction, set up a business there and operate through that business instead of the EU LTD company, unless you really set up some substance in another jurisdictions. But even in that case if you are related you will still risk tax investigation and make sure you have your transfer pricing upfront prepared and operate at arms length
