What prevents two parties with untaxed crypto to open a service provision biz and bill each other to tax it at 0%?

[zen12345]

Hey,
I was discussing this with a couple of friends yesterday. If you have two parties with untaxed crypto, can you not just both open a random service provider business in Dubai, such as lifestyle coaching, bill each other at, say, $1k/hr, and receive crypto in a biz account account on an exchange then later withdraw it to crypto-friendly bank and wire to your personal?

What are potential complications with this?

 

[Sols]

Congrats, you and your friends have invented money laundering.

Would this work? Maybe, maybe not. It depends on how deeply any of the bank looks into the source of funds/wealth. If audited, a future tax authority might make you go back in time far enough to explain where the crypto came from.

 

[JohnLocke]

They did for one of our corporations for 4 years back, and they won, even though we had lawyers and accountants involved. The tax authorities these days don't care what you say and if necessary they will lie to the truth. There is no morality in the public sector anymore.

If audited, a future tax authority might make you go back in time far enough to explain where the crypto came from.

 

[JohnnyDoe]

Hey,
I was discussing this with a couple of friends yesterday. If you have two parties with untaxed crypto, can you not just both open a random service provider business in Dubai, such as lifestyle coaching, bill each other at, say, $1k/hr, and receive crypto in a biz account account on an exchange then later withdraw it to crypto-friendly bank and wire to your personal?

What are potential complications with this?

Why on earth should they do that? They already have crypto, they don’t need that obsolete, inflationary thing called fiat and to deal with risky banks.

Crypto “allow online payments to be sent directly from one party to another without going through a financial institution”

 

[JackAlabama]

Why on earth should they do that? They already have crypto, they don’t need that obsolete, inflationary thing called fiat and to deal with risky banks.

Crypto “allow online payments to be sent directly from one party to another without going through a financial institution”

Exactly.

The other way around would be much better.

 

[MiddleEuroAsia]

Hey,
I was discussing this with a couple of friends yesterday. If you have two parties with untaxed crypto, can you not just both open a random service provider business in Dubai, such as lifestyle coaching, bill each other at, say, $1k/hr, and receive crypto in a biz account account on an exchange then later withdraw it to crypto-friendly bank and wire to your personal?

What are potential complications with this?

Nothing.
I will just add that you need make sure that you have POW (proof of work) and contracts/invoices for your transactions.
for myself,I have custom software built in-house, (CRM, marketing software) that I license to my other company and get paid directly to my bank account. from the bank perspective, it's SaaS. Nothing related to crypto. But mine is much more complicated than simple contracts/invoices.

Why on earth should they do that? They already have crypto, they don’t need that obsolete, inflationary thing called fiat and to deal with risky banks.

Crypto “allow online payments to be sent directly from one party to another without going through a financial institution”

To pay for expenses, I love Crypto but sadly, not everything can be paid with crypto.

 

[hernanday]

Hey,
I was discussing this with a couple of friends yesterday. If you have two parties with untaxed crypto, can you not just both open a random service provider business in Dubai, such as lifestyle coaching, bill each other at, say, $1k/hr, and receive crypto in a biz account account on an exchange then later withdraw it to crypto-friendly bank and wire to your personal?

What are potential complications with this?

Sort of, but we need more info, if you think you are going to stay in Britain with no economic substance in Dubai, and the British tax authorities are not going to accept the idea of you doing transactions outside of their jurisdiction while you sit inside it. Be better to just get a visa to a non-British place and just spend a few months in Britain while being a non-resident.