The only problem with bringing costs into the business is that if they none genuine, which in this case they would be artificially created, this could be considered tax evasion. Depending how this was done it could also be transfer pricing (or mis-pricing). If a company is created correctly to enable someone to trade legitimately in the offshore environment and structured to specifically benefit them then they can operate legally.
Oh, I don't disagree. But I don't believe he stated his home nation or his European state where his customers are, so we are all just speaking hypothetically and generally of course.
I would recommend if he has ample business/ncome from the business to make the expenses genuine. If his belize business is just a front, won't matter what he is shifting, his local tax authority will see it as BS either way. Like if he has no real economic activity in Belize, not even 1 employee, but just a shell with a pobox address, they aren't going to accept it no matter what.
I don't know what his product is, but lets say he is selling ketchup in Europe. He lives somewhere over there. Lets say he sells a case of bottles right now for $100. What he is trying to do is sit in Europe, on his 1000 cases, made in Spain or Italy and sell them to UK or france or something but claim it is all a Belize company or bill the Euro clients for a Belize company. Of course the clients are smart to suspect it, because its not from Belize, he is not from there, the product is not made or packaged there, etc. Tax authorities will see it the same way and call bulls**t. How can this be a Belize sale when he doesn't even have a single import from Belize.
But what if he has legit cost on that $100 case like this:
$10-Marketing + Advertising
$20-Licensing fees of the logo
$20-Royalties of the bottle shape (get a patent for it)
$5-Accounting fees
$3-Web support/development
$5-HR
$15-Research
Total cost $78.
Net Income $22 a case. Now maybe he tacks on a little extra wink wink, to get the Net Income down to $10 a case or $5 case (5 is pretty aggressive but $10 likely will withstand tax scrutiny because 10% net margin is normal).
If he is normally netting $2.2 mil on $10 mil and can get that number down to only $500k in EU and the rest $1.7 mil in Belize its not too bad. He will only pay eu tax on the $500k and $1.7 mil with very little to no taxes.
EU cannot force him to incur all of his cost in the EU. But if EU sees all his customers in Europe,nothing in Belize no employees, no address, etc. How is he going to transfer his income to Belize, not even his customers is dumb enough to fall for it.