How does a "double-tax treaty" actual work for corporation in EU?

[electric]

Hello,


In response to a proposed offshore plan, I received this reply:

You will need a EU entity to avoid corporate tax and to stay legal with the international tax laws in the EU. A Cyprus company is what you need and you must make use of the double tax treaty that Cyprus has with your country.

(For clarification, my country is one of the largest EU countries.)


I have tried to comprehend how double-taxation laws work, but I am even more confused now.


Is there an idiots explanation or "explain like I'm five" overview of how this works?


Thanks!

 

[cyprusbanker]

You may look at these links which have been of great help to me at least:


/company-formation/cyprus-company/avoidance-of-double-taxation.html


AND


http://ec.europa.eu/taxation_customs/taxation/individuals/treaties_en.htm


If you are resident in the UK then:


https://www.gov.uk/government/publications/double-taxation-treaties-territory-residents-with-uk-income


It's not very complicated when you have learned how this works. Actually you simply pay tax in the country where it is lowest by proving that your company is managed and operated in a low tax country like Cyprus, Malta, UK or other places which is done by inserting nominees (director and shareholder).


Hope it helps, else post here and I will try to find more information for you

 

[tax-haven]

It's easy.. if your country has a double tax agreement with say Seychelles (They wont) and you pay 5% corporate tax in the Seychelles (your company does / IBC) then you don't have to pay corporate tax in your home country on that profit. This requires that the management is located in the Seychelels and it can be proved they have control of the company! - Seychelles was a bad example.. but this apply for any other country aswell.