With the rapid development of market economy, the majority of enterprises are desired for tax planning very strong, especially in some large and medium-sized enterprises. Entrepreneurs come to realize that tax planning is a basic right of the taxpayer. It is lawful income which is obtained through tax planning, is different from the behavior of tax evasion.
Under the legal premise, tax planning is the reasonable arrangement of business activities and planning, in order to achieve the purpose of lowest tax burden. It can be said that tax planning is a fine comparison of the tax laws of the Government in formulating tax optimization options. Offshore company registered overseas is one of the methods currently used by many companies to make tax planning.
To set up companies in offshore jurisdictions, company can transfer and accumulate the profits generated by the third country business or investment, a more typical approach is:
Firstly enterprise need to set up offshore company in a number of international tax havens, then invest in other countries through the offshore companies in order to obtain a reasonable tax avoidance purposes. Offshore operations in particular, are welcomed by a number of large enterprises. Many multinational companies in the world are registered offshore companies in BVI, Cayman Islands, Bermuda, Samoa etc., then achieve the biggest part of trade facilitation through the operations between its domestic and offshore companies.
International companies can set up a trust investment company in offshore jurisdictions, then nominal its property as the trust assets of tax havens, is able to achieve the purpose of tax avoidance. For example, a multinational enterprise establish a trust company in the Bahamas and nominal property away from the Bahamas to the trust companies, property operating income will then be hung on the account of the trust company, thus saving the tax expenditure.
For those who are mainly multinational companies engaged in various trade and trade in services, can take advantage of tax haven subsidiaries, depress or raise transfer pricing method to achieve a reasonable tax avoidance purposes. The common practice is embodied in the low price of purchasing and high price of selling of the company in tax haven.
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