What is the best way to reduce your corporate tax with offshore entity?

[Propeller]

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Let's discuss the few options we may have (or all options) to reduce corporate tax when we plan to incorporate a offshore entity. I have seen lots of models that can be used and entities that are used to avoid to pay tax and even except a company from tax i.e. Cyprus non resident company. The question is, which of these methods are actually work and doesn't ?

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[JohnLocke]

I would defiantly say that you are looking into some double tax treaty with your country and the offshore jurisdiction also to avoid any troubles. In addition you want to find some tax advisor or even tax lawyer to help you make use of them since not all tax offices seems to be inteligent enough to know that this is a legit way to reduce tax legally!

 

[happyjohn]

What's wrong with safing up all your earnings in the offshore Companies bank account and move from your country to spend it somewhere nicely!

 

[Propeller]

I would defiantly say that you are looking into some double tax treaty with your country and the offshore jurisdiction also to avoid any troubles. In addition you want to find some tax advisor or even tax lawyer to help you make use of them since not all tax offices seems to be inteligent enough to know that this is a legit way to reduce tax legally!

That's one of the best solutions so far to the TAX issues.

 

[myhand]

There are 2 tools that can be used to avoid to pay tax and reduce the tax to be paid. First one is the LOAN tool which is a simple loan agreement that's made between the company owner and the company itself. The money you transfer from the offshore company's account to your own has to be paid back after some time, it can be 5, 10, 15 or even 25 years! So there has to be paid Interest.


The second option is to make use of double tax treaties that your country MUST have with the offshore jurisdiction of your choice, you will want to pay the local tax there which most often is much less than what you usually are used to pay. Doing so, will except you from paying tax in your own country.


Both setups will require full nominee services with real nominees not corporations! And you will need to have a local tax adviser or tax lawyer to support it towards the tax office which with guarantees will questioning these methods / tools anyway.

 

[JohnLocke]

There are 2 tools that can be used to avoid to pay tax and reduce the tax to be paid. First one is the LOAN tool which is a simple loan agreement that's made between the company owner and the company itself. The money you transfer from the offshore company's account to your own has to be paid back after some time, it can be 5, 10, 15 or even 25 years! So there has to be paid Interest.
The second option is to make use of double tax treaties that your country MUST have with the offshore jurisdiction of your choice, you will want to pay the local tax there which most often is much less than what you usually are used to pay. Doing so, will except you from paying tax in your own country.


Both setups will require full nominee services with real nominees not corporations! And you will need to have a local tax adviser or tax lawyer to support it towards the tax office which with guarantees will questioning these methods / tools anyway.

This must be of great help for the vast majority that is looking for reducing or avoiding corporate- and personal income tax!

 

[averagejoe]

There are 2 tools that can be used to avoid to pay tax and reduce the tax to be paid. First one is the LOAN tool which is a simple loan agreement that's made between the company owner and the company itself. The money you transfer from the offshore company's account to your own has to be paid back after some time, it can be 5, 10, 15 or even 25 years! So there has to be paid Interest.
The second option is to make use of double tax treaties that your country MUST have with the offshore jurisdiction of your choice, you will want to pay the local tax there which most often is much less than what you usually are used to pay. Doing so, will except you from paying tax in your own country.


Both setups will require full nominee services with real nominees not corporations! And you will need to have a local tax adviser or tax lawyer to support it towards the tax office which with guarantees will questioning these methods / tools anyway.

I agree so far with Khan about what he wrote. Another method to reduce tax is to go the expat way where one does not live anywhere for a few years but moving around. Once you have safed up money enough for a living the rest of your live you can settle down somewhere and get your money tax free in there since it was earned in a non taxable environment.

 

[Fliba]

Some great suggestions here. Dividend and Loan agreements are the best tools to use if you have a tax lawyer by side otherwise it will turn into a nightmare with the tax auth.

 

[myhand]

Some great suggestions here. Dividend and Loan agreements are the best tools to use if you have a tax lawyer by side otherwise it will turn into a nightmare with the tax auth.

You want to ask your tax lawyer to help you with the loan agreement and the context of it. That's important!

 

[JohnLocke]

Loan Agreements are a cool tool to get money out of the corporate structure as well as paying dividend if you are in a country that don't tax certain amounts paid in dividende! Otherwise you will need to setup a corporate structure that help you to buy "things" in the business interests for your personal use! That's most often possible with an offshore entety formed in a jurisdiction such as Seychelles, Belize, Cyprus and so on!

 

[fernadex]

Loan Agreements are a cool tool to get money out of the corporate structure as well as paying dividend if you are in a country that don't tax certain amounts paid in dividende! Otherwise you will need to setup a corporate structure that help you to buy "things" in the business interests for your personal use! That's most often possible with an offshore entety formed in a jurisdiction such as Seychelles' date=' Belize, Cyprus and so on![/quote']
That's some of the key factors it seems when it comes to such entities. What you may want to pin point is that the Director of the company can obtain and apply for a loan in his own company and the amount can be paid back over a long period of time for instant say 100k over 30 years with an interest rate of as low as 6% - that's possible and totally legal. For a more advanced solution you can make loan agreements between two companies and take out the money from the entity where you don't need to do accounting and where they don't care about that you take personal money out of the company!

 

[DeMajor]

Really great information in this thread. I have learned that with my Seychelles + Cyprus company setup (the letter I will setup start next week) I will have the best setup to reduce my tax legally maximal. I will pay income / personal tax in my home country from the money I transfer from the Cyprus corp to my personal account in my country. I don't have problems with that. The rest goes to the SC corp. and stay there or is moved further up in the structure to fully be protected.


This seems to me to be the best protected secret at all

 

[fernadex]

Another good way to reduce the tax to be paid for your offshore company is to make all payments to another tax free company i.e. Belize, Seychelles, Anguilla, Isle of Man and so on. Once you have moved the money to such entities you have to pay corporate tax of the rest of the money in the company. It's similar to what the large fortune 500 corps are doing i.e. Google, Coca Cola ..

 

[happyjohn]

How do you want to reduce personal income tax when you take Money out from the offshore Company?


It's actually very simple, you may want to ask a lawyer and tax adviser to help you form a loan agreement that reflect your normal income and where you pay an interest rate that is usually and todays rate in your home country. Don't try to download any form somewhere and use it without professiona ladvise you can get in terrible troubles.

 

[DeMajor]

How do you want to reduce personal income tax when you take Money out from the offshore Company?
It's actually very simple, you may want to ask a lawyer and tax adviser to help you form a loan agreement that reflect your normal income and where you pay an interest rate that is usually and todays rate in your home country. Don't try to download any form somewhere and use it without professiona ladvise you can get in terrible troubles.

I agree with you and the other two guys here. Double Tax Treaty is what you have to investigate and explore your options. All money you take out of the company for private use and bring into your own country by bank transfer has to be taxed otherwise it is tax fraud.

 

[happyjohn]

Beside the double tax treaty we may have learned from the #PanamaPapers that to appoint nominees for a offshore company and not be in control of that company will reduce the tax to 0% only issue is that you can't have access to the offshore account that the company may hold. How do you solve this issue?

 

[Cyrus05]

If you hire a professional, like for an example an accountant to help you or handle your credits, the accountant might be lower your tax rate and give you a good advice in your problem.