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Why do you need a professional for your tax optimization?

Contributed by hongkongtaxfree.com
17 August, 2016

Offshore tax optimization often evokes images of tax evasion. Contrary to the popular belief, if done properly, it is a completely legitimate way to preserve your assets and wealth. 

The international tax optimization is much more than opening a bank account in Hong Kong, Belize, Cayman Islands or elsewhere. Tax planning is inevitable part of your tax optimization strategy. It includes many diverse considerations, among which the timing of income, family expenditures, mortgages, your retirement and savings plan.

As you can see, it is a complex area. Therefore, before taking any further actions, a professional advice from an experienced tax advisor should be taken to minimize your risks.

What is a Tax Planning?

Tax planning and financial planning are closely related. They both help you achieve your short or long-term financial goals by implementing effective and lawful strategies to reduce the tax burden in your home country. By this, you can have more funds available to invest or save.

Nowadays, the income tax rules are more complicated than ever. In order to take advantage of offshore jurisdictions and to accelerate your tax deduction, you are strongly recommended to seek a professional advice.

Why a Tax Advisor?

A tax advisor experienced in the field will guide you to the whole process of moving your assets offshore and minimize your tax liabilities. After a detailed conversation with you, he/she will identify your needs and will recommend you the most appropriate jurisdictions for you. In addition to that, the offshore tax advisor will ensure that your privacy will be fully respected about your offshore bank account.

Personal and/or corporate taxation matters can be complicated and confusing for individuals not familiar with them. Therefore, an experienced tax advisor will explain you in details your tax obligations. The tax advisor will make sure that there will not be a conflict with the tax obligations in the offshore jurisdiction where your business or assets will be located. Furthermore, the tax advisor will be the main person in charge for your business abroad.

A few people can give you a better advice on the usage and advantages of double taxation treaties than an experienced tax advisor. Apart from that, the tax advisor is also fully familiar with the uses of the European Union Directives to decrease withholding or any other taxes among which the Parent/Subsidiary Directive and the Interest and Royalties Directive. The legal professional will give you the best advice on how to use your domestic company and partnerships in international tax planning.

If relevant to your case, the tax advisor will also suggest you how to take advantage from the substantial shareholder exemption and to either minimize or eliminate your withholding taxes. If you decide to go offshore, you will certainly need more information on the anti-avoidance tax legislation and best practices in the field to minimize your risks.

If you are considering Hong Kong as a possible offshore destination, and why not a non resident bank account in Hong-Kong, you will need a qualified tax advisor to explain you the latest changes in the local legislation regarding the issuance of certificate of residence status and help you with the increased administrative burden related to that.


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