To receive
monthly updates on new features in lowtax.net
and tax-news.com just enter your e-mail address
below:
Daily
Tax Quote
New On The Network Today
This feed is published daily with selected new or updated
content from across our network. For a list of network sites, many of
which feature daily news, see below.
Providing essential tax news and information for globally
mobile artists, contractors, entrepreneurs, professionals, small businesses,
sportspersons and entertainers.
Lowtax Network Sites
Lowtax Network Portal:
'Low-tax' business and investment in the top 50 jurisdictions covered in
exceptional detail.
Tax News: Global
tax news, continuously updated through the day.
Law & Tax
News: Daily news and background data on tax and legal developments
for international business.
Offshore-e-com:
A topical guide to offshore e-commerce focused on tax and regulation.
Lowtax Library:
One of the web's largest and most authoritative business and investment
information sources.
US Tax Network:
The resource for free online US taxation information, covering: corporate
tax, individual tax, international tax, expatriates, sales and e-commerce
tax, investment tax.
NEW! Personal
Business Tax Guide: Providing essential tax news and information
on business for contractors, entrepreneurs, professionals, small businesses,
artists, sportspersons and entertainers.
Lowtax
Network Hosted Blogs
20 August 2008
Blacklisted Offshore: Private Consultant's Opinion What comes first into your mind when thinking about how much the countries with
high taxes are not happy with existence of low tax jurisdictions? What exactly
is on their agenda and how it touches you – ordinary user, investor, businessman,
individual.
An offshore company, as a standard instrument of international tax planning,
is normally a company incorporated in a low tax or tax-exempt jurisdiction.
Using such company is quite legal when it is used for legal purposes. However,
from the moment of introduction of first tax haven regimes governments of countries
with high taxes campaign against offshore jurisdictions and their clients. Their
concerns and efforts become even more intensive with the march of globalization.
Decades ago so-called anti-offshore measures were a home policy matter. Today
many international organizations are involved, such as OECD, FATF, United Nations,
EU and others.
Their concern number one is "harmful tax competition". In fact low
tax jurisdictions attract too much of mobile capital from other countries. Disadvantaged
countries claim it to be nothing but tax dumping that destroys their tax basis,
encourages tax avoidance and shifts tax burden to less mobile tax basis, i.e.
labor, real estate, consumption etc. The opponents argue that free tax competition
same as in any business is of more good for the world's economy and that there's
no reason for tax regimes to be similar all over the world.
Whatever the motives are and regardless how much hypocrisy you can observe
at both ends the fact is that low tax centers are subject to discrimination
mostly of economic character. International organizations create constantly
changing black lists, make reports and give recommendations.
The real measures, however, are being taken on the level of national legislation
of each country. Most often there exist "controlled foreign corporations"
or similar regulations. In some countries it takes a simple form of a decree
providing for a substantial withholding tax being levied from each payment in
favor of a business partner located in one of the blacklisted countries, no
matter what you pay for and/or whether you control the beneficiary company.
In other cases the burden of economic responsibility is shifted to the banks,
which get obliged to create reserves for each transaction if the counterpart
is from a blacklisted country. Not to mention requirements to each and every
involved professional to report suspicious or fraudulent activities. The aim
is to eliminate economic benefits from using tax haven regimes.
The only advice that naturally suggests itself in this case is to get familiar
with the "anti-offshore" legislation of the countries involved in
your business before you buy in an offshore scheme. Black lists can be numerous
and quite comprehensive but there are always exceptions. A number of decent
locations is still available for different businesses. Offshore service providers
located in a particular offshore jurisdiction are rarely able to consult you
on this matter. The work is for you and your local lawyer, auditor or business
consultant.
Concern number two is facilitation of criminal activities, in particular money
laundering. It results from the lack of satisfactory legislation preventing
the mentioned activities in certain jurisdictions.
You can hardly find a professional who will give you a service without asking
for a number of personal documents within the "know-your-client" policy.
However, despite recently many jurisdictions updated their legislative basis
to meet the international standards there are still loopholes. You will be offered
a number of opportunities claiming to be the legal way to protect your assets
or to avoid tax payment. Be careful. Some offshore service providers still promote
secrecy, anonymous corporations and bank accounts as the right course of business.
They build a sophisticated "form over substance" scheme involving
several legal entities and, yes, they claim it to be for the purpose of privacy
and asset protection for law-abiding citizens, but what they actually do is
teaching you to lie that you are not the beneficiary to the scheme. They want
to sell their service and forget to remind you that you are the responsible
one and that at least you have to report those funds at home revenue authorities.
The above two problems are so closely related that actually sometimes very
difficult to distinguish. We don't speak, however, about voluntary criminals
here.
Whether you wanted your offshore company to save on taxes or hide money trail
for security reasons apparently secrecy is not a merit any longer. A range of
circumstances when it comes right in place is narrowing every day. Those few
currently remaining secretive offshore centers like Panama or Singapore are
the "next in line". Evaders can reduce but hardly eliminate the risk
of being caught by transferring money from one tax haven jurisdiction to another.
If one gets caught the consequences can be grave. Tax
fraud is a criminal offense in most countries and is punished by fines and
imprisonment.
Governments want your taxes in their budgets. You want a justified tax burden.
Everyone is in his own right. Probably it's the right time for you to reconsider
the role of tax-free offshore instruments in your business structure. You can
shift it a bit to get a perfectly legal low tax scheme instead of a half-legal
secrecy-based though tax free one.
You have been
reading an entry on the following blog:
Offshore Advisor Mary Cleo of Offshore Advisor - all about business off shore Mary is a consultant and blogger at Offshore Advisor - free online consultancy on offshore services covering asset protection, offshore banking, second citizenship and more. Contact Mary via mary@isla-offshore.com.
Other recent
entries in this blog:
22 September 2008 Scam Busters: Second Citizenship and Passport You need a second passport? Internet has a plenty of inviting information. Too
many offers that are too good to be true. You need a cheaper passport, but definitely
have no intention to loose your money being conned. How to spot the scammers?
The only official economic citizenship programs in existence are those of Dominica,
St.Kitts & Nevis and Austria. The cheapest one will cost you somewhere close
to US$ 100,000. There are also countries that do support a kind of economic
citizenship programs, quite formal and legal, but they don't speak loud about
this sensitive issue wishing to avoid disapproval by the world's community.
Such silence creates a mystery giving the ground to innumerable scams and making
it very difficult to find a real promoting agency. Below are some advices to
those seeking on their own.
So you found a website promoting second citizenship and passport programs in
one or several countries. Start with analysis of the offer itself and have in
mind that at least:
There are no "instant" passport programs taking 1-15 days. Any
country is supposed to thoroughly vet your application and facts from your
past, which takes at least a month, and happens quicker in lucky cases.
There are no too cheap options. More or less real prices start with US$
30,000 and that will be a citizenship of one of the Central or South American
countries for that price.
You can hardly find a real program with "no need to travel". The
only exception known to me is St.Kitts & Nevis program, but the absence
of such requirement is being compensated by very strict verification and due
diligence procedures. There's an option in Dominica citizenship program to
arrange a personal interview in the country of your residence for an extra
fee. I don't know other reliable programs with no need to visit the country
in person at least once.
There are no programs granting "passports to everyone no matter of
your current nationality or citizenship; just pay money and you get it".
Your current citizenship's country may fall into lists of countries where
it's impossible to check your background, so your application can be rejected.
If everything sounds nice, go further:
Google the company's name including its domain name and any specific names
appearing on the website to see if there are any negative comments left on their
service by their former clients. Absence of bad information is a good sign but
far not a proof.
Check the website's history at http://web.archive.com
if any. If the website is freshly baked, or has no history at all, be careful.
Earlier versions of the website may help you to recognize the hidden agendas.
However, you should have in mind that some scam websites are still able to
exist long enough and have stable history and background. A simple reason is
that not every victim is willing and able to tell the world that he or she got
scammed, and this is indeed so stupid sometimes. Besides, the scammers' gains
in each particular case are not substantial to develop into an international
scandal or involve Interpol into investigation. The hiding scammer is difficult
to find and punish. The scam site is alive and thriving.
Phone the company to speak in live. In most cases you even don't get through
or reach their voicemail.
Contact them by email with interest about a specific program. In most cases
you will be requested to pay first, which is actually quite a normal practice
among second citizenship promoting agents both real and fraudulent. With invoice
you get more information to examine and possibly find a trace on the Internet.
Some frauds are not smart enough, or sometimes simply not able, to create a
new underlying legal entity with a new bank account. It might happen you'll
find interesting facts about that company's past performances.
Still looks good and reliable? Ask for legal basis details, other than just
"by means of naturalization if you fit the criteria". What are the
criteria?
Some frauds will furnish you with a legally looking document, which is sometimes
worse than not giving anything. You risk to get a passport of a defunct person
with just replaced photos in it, or a passport printed on a canceled blank subject
to be destroyed, or the one simply stolen. No need to tell about inescapable
problems at the first border you try to cross with that passport.
Those "criteria" are a very sensitive part of the process and only
a local licensed legal firm in the country where you want your second citizenship
is able to handle it within the letter of the law.
The climactic moment is payment of money. After you did it you may never hear
from those people again.
The best recommended way to arrange the deal is to take a vacation, travel
to the country, meet those people in person, have a lawyer to go with you everywhere,
see the immigration offices and the whole application process with your own
eyes. Even so, unlike with those official economic citizenship programs, there's
no guarantee that the passport will not get withdrawn in future, but at least
you reduce risks to a possible minimum. You don't do this often, probably once
upon a life. You can afford such travel. You better do.
05 September 2008 Offshore Banking: Failure to Open a Bank Account You decided to join the club and enjoy the benefits of offshore banking. You incorporated an offshore company as recommended by your advisor, chose a sound and reliable bank, prepared the requested documents and submitted your application, but unexpectedly the bank didn't approve it and denied to open you an account. Why would a bank that spent so much time, money and efforts to attract more customers reject some applications?
Unfortunately any bank has the right to refuse with no comments. Let's see what could be the reasons.
Generally, this might obviously happen because the bank is not interested in you as a client. You don't fit the current appetite of the bank. You are expected to become a new investor while you are looking for a current trading account for your business; or the bank is oriented to clients with a significantly bigger account turnover than you anticipate.
Another problem is that the bank may be afraid of having you as a client because you fall into the category of undesirable customers. None of the well-established banks with good international reputation would ever wish to provide service to a criminal. Every bank has its own perception of troublesome business and relevant technical procedures assisting its managers to detect potentially unreliable clients. It might happen that the country of your citizenship, residence or domicile, jurisdiction of incorporation of your company or type of your business are black-listed by that bank.
Some clients fail to provide the bank with the right image of their business in general. You may simply be inaccurate and make a typo here and there, in the telephone number or address details, and that's it, you look suspect to the bank's compliance manager. Sometimes the reason lies deeper. You overdo trying to keep your privacy. You tend to tell the bank as less as possible. The result is the bank doesn't get a sufficient picture to be sure no problems will follow you. Most banks prefer to brush aside any suspicious client rather than engage in investigation because in case of mistake they might easily get more troubles than benefits. To avoid this situation do your best to make your business reality transparent enough for the bank to make a positive decision.
All these and other issues of that type can normally be avoided should you have a quality preliminary consultation with a professional independent advisor.
Penelope Wise
Penny Wise but not Pound Foolish! But remember: I am not offering investment advice. My comments are just for your general information; I do not recommend investments, and you should take professional advice before entering any investment contract.
Interested in blogging
on Lowtax? We are currently accepting
submissions!
By hosting your blog on the network you or your company
can expect to benefit from our very high traffic levels.
We boast one of the largest communities of professionals
(tax, offshore, legal, etc) and HNWIs. If you are already
a blogger, but want a wider audience, you can move an
existing blog to our network, or if you've never blogged
before, why not have a go? We'll help you get started...
One of the web's largest and
most authoritative business and investment information sources. Alongside
topical, daily news on worldwide
tax developments, you can receive weekly newswires or
access up-to-date intelligence
reports on a range of legal, tax and investment subjects.
Our 16 constantly updated
intelligence reports cover every important aspect of 'offshore' and international
tax-planning in depth, including banking secrecy, the EU's savings tax
directive, offshore funds, e-commerce, offshore gaming and transfer pricing.
Reports are available for immediate downloading or as subscription
services with news pages.
Advertising & Marketing
With over 50,000 qualified readers every month our web-sites
offer a number of cost effective, targeted advertising,
sponsorship and marketing opportunities:
Display advertising - from 'skyscrapers' to 'buttons'
Content/article submission and sponsorship
Opt-in email marketing
On-line Services Directory listings
Could your corporate web-site or newsletter benefit
from incorporating regularly updated news and content
tailored to serve your clients' interests? We can provide
a variety of maintenance-free news and content solutions
that can be seamlessly integrated and dynamically delivered:
IMPORTANT NOTICE: THE LOWTAX NETWORK
has taken reasonable care in sourcing and presenting the information contained
on this site, but accepts no responsibility for any financial or other loss
or damage that may result from its use. In particular, users of the site are
advised to take appropriate professional advice before committing themselves
to involvement in offshore jurisdictions, offshore trusts or offshore investments.
All materials on this site copyright THE LOWTAX NETWORK 1999 to 2010.
All content on this site
has been provided by BSIRN.
LOWTAX.NET
13/07 
