DTA fact and differences

[JackieTsan]

Hello to everybody,

a quick question. What is really DTA?

So if an offshore from country A (NOT signed DTA) invoices a company in Malta, and another offshore from country B (HAS signed DTA with Malta) invoices the company in Malta, what is the difference?

Since dividents and taxation in both countries A, and B is 0%, and in Malta the dividends is X (if you are tax resident of Malta) and you take the dividends..

So what would be the difference selectin to open an offshore in a DTA signed between a NON DTA signed with the invoiced country? (Malta).?

Thanks to all

 

[Martin Everson]

Since dividents and taxation in both countries A, and B is 0%, and in Malta the dividends is X (if you are tax resident of Malta) and you take the dividends..

A DTA is a lot more than dividend withholding tax rules. You need to fully read it to appreciate it.

So what would be the difference selectin to open an offshore in a DTA signed between a NON DTA signed with the invoiced country? (Malta).?

Can you rephrase this question so it makes better sense?

 

[JackieTsan]

Many thanks for your time @Martin Everson
I think to open a company and I am between Marshal OR Seychelles.

I will need this company to invoice companies in Malta mostly & Cyprus.

Marshal has NO DTA with Cy & Malta
Seycheles HAS DTA with Cy & Malta

What should I prefer, is that important or no?

As i need to proceed, I need to decide.. is this important ? BEcause if I need TDA i need to open to Seychelles. If no I need to open Marshal.

Clear?

Hundreds of thanks

 

[Martin Everson]

I am not sure what business activity you are undertaking as this will make a difference. For Marshall Island or Seychelles have you already decided where you will find banking or EMI support or it is not needed?

Also what residency status would you have in Malta or Cyprus. For example Malta has resident non-domicile tax scheme. Cyprus also does not tax investment income. So if you were considering setting up a company for investment purposes as a Cyprus non-domicile it would be better to do it in your personal name and it would be tax free.

Anyway it is impossible to answer your question unless you state your residency and business activity. DTA's are only one part of the puzzle.

 

[JackieTsan]

Hi again @Martin Everson

EMI they say they will open... (The agent)..

I will be tax resident of Cyprus next year (personally). The company i have (under nominees in cyprus) is there.. so I want to invoice to Sey / Marsh to Cy in order to save tax..

No idea about investment purpose company... Its consulting and sell online services.

Thank you!

 

[Martin Everson]

so I want to invoice to Sey / Marsh to Cy in order to save tax..

It's not the best idea to invoice your Cyprus company from your offshore company to reduce taxes as everything would need to be done at arms length. Also Cyprus corporate tax rate is fairly low by EU standards. Unless you are at Bill Gates level I would not bother.

 

[JackieTsan]

Thank you @Martin Everson . Cy has 12.5 tax which will go 15% next year. So invoicing with 0% a part is good, isn't it? Saving something.

Also as you mentioned Marshall is good for b2c yes?

What does "done at arms length" mean??

 

[Martin Everson]

Thank you @Martin Everson . Cy has 12.5 tax which will go 15% next year. So invoicing with 0% a part is good, isn't it? Saving something.

So you going to lengths to save 12.5%? Most Europeans would be happy to have that level of corporate tax rate. Then you want to live in that country and wonder how roads, hospitals, police and other public services etc are funded. I just hope its 15% of 1m+ not 15% of 50k you are trying to save .

 

[JackieTsan]

Yes it's indeed 15% of around 100k not more...
That's my budgets unfortunately

Unless you all great guys here help me make something online now