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Offshore corp profits

alaintou

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Jan 15, 2019
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Hi all, I'm a new member here, I've learned a lot but I have simple question that my accountant (local) can't answer. From your experiences, if we are having a corp registered in Caribbean, any island where no bookkeeping is needed, and shareholders need to declare worldwide earnings in their own countries, how can the corp profit be verified? Are they going to ask for bank account statements?

Thanks
 
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This will require accounting for the company and audited accounts from some trustworthy accountant i.e. Price Water House, Deliotte, KPMG or other trusted accounting firm.
 
So you mean that even if the country where the corp is registered is not asking for yearly filling/bookkeeping, we'll have to hire big firm to back us up in case we are asked for profit proof in our countries?
 
So you mean that even if the country where the corp is registered is not asking for yearly filling/bookkeeping, we'll have to hire big firm to back us up in case we are asked for profit proof in our countries?
yes correct, that's how it works if you want to avoid trouble with the local tax office! Sorry but that's todays fact after all the s**t they are regulating around the world with the USA paramount!
 
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You will have to research on the banks, it's them that are going to report you, so if you can find (I doubt) a reliable bank that is not under CRS and other information exchange regulations you may have found the key to total banking privacy. As I said, I don't believe this exists unless you may have millions available.
 
Aaah, now I see the picture, thanks! It's the CRS thing that f#^&ed it up. So bank will report an amount, local taxman will ask me what's that money, I'll say it's from a company I own shares from, they'll ask for bookkeeping, that I won't have since not needed from the registered company location, then I'll need Price Water House, Deliotte, KPMG
 
I am not sure if that will work that way.
Things that you should worry about are:
- CFC rules (if the residence country have them)
- dividend tax

Local tax authorities will not ask you for the books of the company.
For sure entire amount will be taxed with dividend tax, but if the country has CFC rules they might FIRST tax entire amount with corporate tax which is the country where you are resident, and the SECOND tax will be dividend tax on the rest.

Avoiding CFC can be done by proofing that the management is not done by shareholder, and that it is in fact managed in country where it is incorporated.

This is what I've found so far, if I am wrong - please someone correct me.
 
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Aaah, now I see the picture, thanks! It's the CRS thing that f#^&ed it up. So bank will report an amount, local taxman will ask me what's that money, I'll say it's from a company I own shares from, they'll ask for bookkeeping, that I won't have since not needed from the registered company location, then I'll need Price Water House, Deliotte, KPMG
You got it! thu&¤#
 

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