Almost every large corporation or wealthy entrepreneur has their assets offshore.
In countries with developed market economies, the so-called offshore zones, offshore holdings, international financial “channels” for the movement of income and capital, “tax planning” have been developing in the last two decades in order to reduce taxes paid to the state.
It should be noted that all these “financial news” are entrepreneurs’ response to state regulation. Methods are improving, the scale is increasing.
By the way, COREDO is an expert in corporate finance. Main services: financial licenses, registration of legal entities abroad, AML consulting.
The creation of transnational corporations and banks (TNK, TNB) also contributed to the development of offshore zones. TNCs and TNBs use the mechanism of international transfer operations.
The flow of capital and income is carried out along the optimal tax routes. In corporate deliveries and settlements, so-called transfer prices are used. As a result, the state in which the branch or subsidiary of the corporation is located, either cannot withdraw tax at all due to low profits, or taxes it at a low rate. The parent company also pays taxes not to its state where it is registered, but at low rates in offshore zones.
At the same time, it should be remembered that offshore zones create opportunities for money laundering and corruption. They harm the development of national economies, especially for countries in transition.
States are trying to deal with new phenomena. In the US, EU countries, there are strict anti-offshore, anti-transfer and anti-dumping laws.
Tax legislation in countries with developed market economies limits the benefits for income received with the participation of offshore companies. For example, in the US they are not subject to investment incentives. Offshore companies are not subject to benefits under international agreements on the elimination of double taxation. Agreements entered into on behalf of offshore holdings or companies are carefully checked by the tax authorities.
At the same time, offshore is the insurance of the company’s bank account against possible illegal claims from private biased persons from the state. organs.