Dominica and tax status for IBC’s

bigladsmith

Building Trust
Entrepreneur
Mentor Group
Hi all,

I notice this recently... see further down below.

I'm Interested to know if this is now the case as Dominica was one of the countries I was considering when setting up my offshore company. Does this mean any company registered since Jan 2019 is now liable for 25% tax on income from all worldwide locations? Is this on total income or just profit?

Also, does anyone know if the situation has changed with regards to filing accounts, this was not previously a requirement as far as I was aware...

Corporate income tax – Last January 2019, Dominica gazetted the International Business Companies (Amendment) Act, 2019. Under this amendment, Dominica repealed tax exemption for International Business Companies. However, IBCs incorporated on or before December 31, 2018, will be grandfathered and exempt from taxes for three years, until December 31, 2021.
IBCs incorporated on or after January 1, 2019, will not enjoy tax exemption and will be subject to the local tax regime which is currently 25% income tax on worldwide income. Amendments to the Income Tax Act are expected during this year.


See here:

 

BTCNG

Building Trust
Entrepreneur
I got this by email :

Dominica companies taxed on worldwide income.
In March 2019, the Parliament of the Commonwealth of Dominica enacted a series of new laws, forced upon it, as well as upon many other independent nations, by the OECD as a global effort to combat tax evasion. Sadly for Dominica it involved implementation of the following new laws:
-Offshore Banking (Amendment) Act, 2019
-International Business Companies (Amendment) Act, 2019
-Fiscal Incentives (Amendment) Act 2019
The following changes come into effect:
•All International Business Companies (IBCs) registered before 31st December 2018 become liable to pay 30 % corporate tax on their worldwide income starting from 31st December 2021
•All IBCs registered after 1st January 2019 become liable to pay 30% corporate tax from 31st December 2019
•The laws as of 21st March 2019 do not require IBCs to maintain any substantial presence in Dominica
•The laws do not stipulate at this time to file any annual return with the Inland Revenue Department (IRD) or the Registrar of Companies
•All Offshore Banks registered and licensed in the Commonwealth of Dominica become liable to pay corporate tax in the same way as the IBCs previously mentioned.

Maybe this will help you
 

bigladsmith

Building Trust
Entrepreneur
Mentor Group
That’s interesting, lots of new info there and it differs slightly from the website info I attached.

I guess the question I have now is if there is no requirement to file an annual return how on earth do the IRD and other departments know how much your worldwide earnings are?

Any others on the forum have info on this?
 

BTCNG

Building Trust
Entrepreneur
I guess this is going to be the next step

Therefore, better to be careful with this jurisdiction.
 

bigladsmith

Building Trust
Entrepreneur
Mentor Group
Seems that way. A very loose set of details isn’t great for forward planning. Seems other locations are being more robust...
 

BTCNG

Building Trust
Entrepreneur
Take into account that most probably other jurisdictions will follow.
The loopholes are being closed each and every year
 

bigladsmith

Building Trust
Entrepreneur
Mentor Group
Ok, maybe more clear as the month pass in 2019 for Dominica. What about other places that still have good laws in place? Who’s knows about Seychelles or Marshall Islands or BVI? Any major changes?
 

BTCNG

Building Trust
Entrepreneur
I think BVI are under the spot now as most of the "tax" planners opened new comapnies there in recent years.
 

bigladsmith

Building Trust
Entrepreneur
Mentor Group
There seems to be a complete lack of reliable data out there about this.... has anyone further info or detail? I believe a whole bunch of locations/jurisdictions are now bowing to the OECD, is this the beginning of the end for offshore zero/minimal tax possibilities?
 

darkster

Trusted Member
Business Angel
Mentor Group
Commercial Service
Not to the end, things just get more difficult, expensive and complex compared to before! The entire financial world is burning, bubles and greed have made it impossible to leave it as it was for just two years back.

This means, today you will need some really good structure to stay under the radar and you need to put some time and money into such setups. A simples IBC is past time.
 

Martin Everson

Offshore Consultant
Business Angel
Yup EU....sorry OECD want to end all tax havens. The entire Caribbean have no choice as deadlines were given by EU else they will end up on blacklists as I mentioned on another thread. The Caribbean countries are terrible negotiators unfortunately :(
 

bigladsmith

Building Trust
Entrepreneur
Mentor Group
Thought this be the issue as said by Martin. What possibilities are left? RAK, Seychelles, Mauritius, Marshall Islands?
 

Martin Everson

Offshore Consultant
Business Angel
What possibilities are left? RAK, Seychelles, Mauritius, Marshall Islands?
The Marshall Islands was blacklisted by EU

RAK non-resident companies are like Caribbean non-resident companies so expect same outcome of pressure from EU to start taxing. Mauritius GBC2 tax free companies were abolished on Jan 1st 2019 due to EU pressure.

Even small countries like Fiji have felt EU's blackmail.

--- start quote

"The Economy Minister Aiyaz Sayed-Khaiyum has labeled the European Union bullies for putting Fiji on their tax haven blacklist.

He says under the guise of tax cooperation, the EU has particularly picked on smaller and weaker countries whose domestic tax policies are naturally geared toward economic growth."

--- end quote

Best chance of financial freedom is to leave the EU its a mafia.
 

bigladsmith

Building Trust
Entrepreneur
Mentor Group
Lots of bully from the EU, shocking. So what is the possibility for operating a company where tax is low and accounting/bookkeeping are not required in law?

If a jurisdiction or country is on the blacklist what does that even mean in practice? For me wanting to set up a new offshore company how is it restrict me? How about opening a bank account to support the new former company?

I don’t see how a blacklist works if I have no business made in the EU and do not live in EU?
 

Martin Everson

Offshore Consultant
Business Angel
So what is the possibility for operating a company where tax is low and accounting/bookkeeping are not required in law?
Find an offshore company with a local offshore bank in same jurisdiction.

If a jurisdiction or country is on the blacklist what does that even mean in practice?
Harder to bank that company in EU banks, harder with EU banks with branches abroad and harder with banks that use direct EU correspondence banks.

For me wanting to set up a new offshore company how is it restrict me?
There is no restrictions on you.

How about opening a bank account to support the new former company?
No restrictions if you can find bank.

I don’t see how a blacklist works if I have no business made in the EU and do not live in EU?
The same way US OFAC works even if you have no business or connection to the US. Banks globally observe blacklists in trading relations.
 

bigladsmith

Building Trust
Entrepreneur
Mentor Group
Well my ties to the EU are now tiny. Only older family there, all property and banking moved to the Far East.

Back to the first topic, have Dominica be removed from grey/blacklist - reliable info on this?
 

Martin Everson

Offshore Consultant
Business Angel
Consequences of being on the EU blacklist as stated in link above are:


--- start quote

"In terms of consequences, Member States have agreed on a set of countermeasures, which they can choose to apply against the listed countries, including increased monitoring and audits, withholding taxes, special documentation requirements and anti-abuse provisions. The Commission will continue to support Member States' work to develop a more coordinated approach to sanctions for the EU list in 2019. In addition, new provisions in EU legislation prohibit EU funds from being channelled or transited through entities in countries on the tax blacklist. "

--- end quote
 

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