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Effective Tax Planning

One of the most recognised aspects for what an offshore environment is best known for is represented by tax optimization opportunities, but this absolutely does not mean that there are no taxes whatsoever in the whole offshore zone. Each jurisdiction has its own laws and rules which must be observed at all times. It is necessary to research, study and understand these regulations in order to benefit from the opportunities that particular jurisdiction offers.

In so called ‘tax heavens’ non-residents often are not liable to direct taxes, which are however applicable to residents. Even various onshore jurisdictions such as UK, Canada and the Netherlands are used for the offshore purposes.

It is always a question of the knowledge and deep understanding of the characteristic features of each particular country and its legislation that can be used for major benefits for personal affairs or business objectives.

When looking for tax optimization it is important to distinguish between tax avoidance and tax evasion, which are two different activities. ‘Tax avoidance’ is a legal activity that involves all the necessary procedures in order to minimize tax liabilities for a person or business that is 100% legal and corresponds to the existent law. In its turn, ‘tax evasion’ is an illegal activity which is an avoidance of paying taxes to the fiscal authority the business or individual is involved in this is a serious offence.

It can be a daunting task to achieve and perform tax avoidance actions due to the multitude of legal procedures involved in the various jurisdictions it is therefore strongly suggested to consult with an international financial consultancy company that will be able to work out the right solution for the needs of every client individually.

Onshore jurisdictions are concerned not only about ‘tax evasion’, but even about ‘tax avoidance’ procedures, as significant capitals are directed towards offshore zones. That is why they join in the international organizations in order to cooperate against this tendency. It has been agreed that every ‘tax avoidance’ plan undertaken by an individual or a company should be understood and evaluated as only a part of a more complex business scenario containing other significant elements.

Pure ‘tax avoidance’ procedure might require a special investigation and, if necessary, the onshore authority can make additional laws in order to make some assets and transactions taxable in that particular case. Tax optimizations procedures made with the lack of knowledge, care or attention may lead to undesired consequences.

It is important to be experts in all the jurisdiction’s laws details, to know local habits, traditions, lifestyle and practices in order to undertake and implement a right action plan for a non-resident entity. This can be achieved with an experienced financial consultancy company with good international reputation and solid values are the tools in helping you structure the business in the most efficient way.



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