Hi Guys,
Bit of a strange question, although probably not for these forums
I'm looking to try to reduce the corporation tax a little by utilising an offshore company. We sell purchased from a 3rd party on a subscription basis, although the 3rd party is based in The Netherlands they have a UK Ltd company which we purchase from, we also bill that UK Ltd company for consultancy.
We have a couple of UK Ltd companies. If we were to form an offshore company and bank account could we purchase the software and bill the consultancy to that offshore company which in turn would purchase it from the 3rd party company allowing us to take advantage of a 0% corporation tax for that company since both its transactions would be international? The UK companies would still pay corporation tax but it would be reduced, also if that offshore was in the EU and VAT registered the VAT would cancel out?
The intention would then be that we drew dividends from that offshore as foreign income and paid the standard 10% tax on them via self assessment.
Does this sound feasible and legal? Any suggestions on the location for the offshore? I was originally considering BVI due to the cheap setup costs but Cyprus seems to be very popular on here.
Cheers, Andy
Bit of a strange question, although probably not for these forums
I'm looking to try to reduce the corporation tax a little by utilising an offshore company. We sell purchased from a 3rd party on a subscription basis, although the 3rd party is based in The Netherlands they have a UK Ltd company which we purchase from, we also bill that UK Ltd company for consultancy.
We have a couple of UK Ltd companies. If we were to form an offshore company and bank account could we purchase the software and bill the consultancy to that offshore company which in turn would purchase it from the 3rd party company allowing us to take advantage of a 0% corporation tax for that company since both its transactions would be international? The UK companies would still pay corporation tax but it would be reduced, also if that offshore was in the EU and VAT registered the VAT would cancel out?
The intention would then be that we drew dividends from that offshore as foreign income and paid the standard 10% tax on them via self assessment.
Does this sound feasible and legal? Any suggestions on the location for the offshore? I was originally considering BVI due to the cheap setup costs but Cyprus seems to be very popular on here.
Cheers, Andy
