Most of American films show us a utopian situation, when a successful businessman becomes enormously rich in a second, concluding only one deal. But in real life this process takes several months of negotiations and scrupulous work of the tax advisers. Profit can turn into losses if you do not consider all articles of the law.
According to statistics, while drafting income statements 75% of businessmen turn to the tax advisers to avoid breaking the law, on the one hand, and overpaying, on the other. It is important to spare no expense on the qualified adviser. Let us take the example, a profitable deal was concluded in the country with double taxation agreement. After receiving income according to the contract, it transpired, that with regard to local laws, income of international companies was fined of up to 25-30%. As a result, you might lose much more, if you neglect the tax adviser, who is able to predict and calculate all tax consequences and offer the best solution.
One of the trickiest aspects is money withdrawal. Some owners of the companies mix the concept of «personal finance» and «company funds» and, as consequence, face tax losses by trying to turn one into another. In order to avoid such situation it is necessary to remember about the laws of the jurisdiction of the country where the company was incorporated.
Do business honestly and transparently, while concluding a serious deal, as all your X-files may come out. They could become publicly available by an accident, due to the vast development of Internet technologies.
Imagine two companies with the common beneficiary, but according to the documents they are not connected. Serious problems may occur if any information about their interdependence appears. Even if the staff knows how to answer the phone calls, employees work in separated offices, security of the company follows all the rules, the Internet channel is still the same for both companies, and as a rule, information about IP address is not hidden, so investigation may show that employees of both companies have visited the same websites with the identical IP address. This fact is enough to suspect the affiliation of the companies, that may cause a more thorough investigation from the tax agents. There are even businesses that accumulate and sell X-files.
This does not imply however, that the easier offshore jurisdiction legislation is, the better taxation conditions it provides. It is necessary to consider different kinds of state fees, while calculating planned taxation and the effectiveness of future business.
A particularly good example is Delaware, which is sometimes called as an «offshore state within the USA». Nevertheless, there are federal laws within the state (tax included). Delaware company should not pay taxes if it is founded by non-resident of the USA and there is not operating on the territory of the country. But as soon as the company gets the profit in the USA, state and federal income fees appear. You have to be sure that there will not be any business activity in the USA, otherwise, it is better to register company somewhere else.
These are the main rules of the «tax games» which should be known by each and every owner of the international company. When facing any difficult situation, please, contact our professional adviser and we will help you to find the best cookie-cutter try to find a way out.