International Tax Planning
In the era of globalization, business has long gone beyond the boundaries of one country and acquired an international character. Tax systems in different countries are often radically different.
International tax planning from top accounting firm is a legitimate tax minimization activity in international business. This is a whole system of measures that is designed to legally reduce tax liabilities, as well as simplify tax administration.
In tax planning, there is a preliminary calculation of options for potential taxes, types of taxes, depending on the activities of the company, the legal form of the enterprise, the country of registration of the company and its potential connections with business partners from different countries.
- What will the company do (type of activity).
- From what it will receive profit and what kind (dividends, interest, royalties, salaries, remuneration, capital gains, etc.).
- In which country will he work, and where will he make a profit.
- Current and potential taxes to be paid: income tax, capital gains tax, withholding income tax, VAT, real estate tax, capital tax, distribution tax, etc.
- Business goals and priorities. Before organizing tax planning, you need to know exactly the goals of tax planning and the correct distribution of priorities.
- Reduction of the tax burden (reduction of taxes and taxable base),
- Simplification of financial administration (accounting and reporting),
- An increase in the reporting financial period or obtaining a deferral of tax payments,
- Protection of business and beneficiaries.
- Legality. All activities related to tax planning must comply with international and national legal norms and agreements. Only complete legality of actions is the key to the success of your business.
- Naturalism. Real rationale for actions – all activities and actions of the company must be justified so as not to arouse any suspicion on the part of the relevant authorities.
- Professionalism. All actions must be performed by experts: lawyers, specialists in the field of law, taxes, etc.
- Unsubjectivity. To obtain an effective result, it is necessary that one party is involved in the development of schemes and their translation into reality. Otherwise, the loss of interest in the subsequent stages of tax planning may affect the quality of such a process.
Cyprus does not lose popularity as a jurisdiction for the creation of new companies and the expansion of existing structures. It is quite easy to scale a business here, companies incur low operating costs for their own maintenance, it is possible to quickly build a full-fledged administrative office, which will become proof of economic presence in the country.
Our high-qualified team is ready to help with the registration of a company in Cyprus and competent advice on tax planning, taking into account the structure of your business. With legal assistance, you will be able to optimize commercial activities of an international scale, as well as adopt best practices in building tax strategies and a strategic development model.
For many years in a row, Cyprus has remained a serious and strong jurisdiction in the EU zone with minimal tax rates and huge prospects for large-scale business.vThe tax system of Cyprus is very attractive for reducing the tax burden and the overall cost of maintaining international companies.
- The taxation of the republic and the legislative framework are developed in accordance with the EU Directive, as well as the provisions of the OECD (Organization for Economic Cooperation and Development);
- The state has not just adopted all the directives – here, unlike most EU member states, there are no restrictions on the minimum period of ownership of the property of investment companies to receive tax benefits;
- The Republic of Cyprus is the leader of the investment industry in the EU zone with high prestige and worldwide recognition;
- Close cooperation with third countries outside the EU area is confirmed by an impressive number of DTTs, which are constantly supplemented by new agreements;
- Tax planning in this jurisdiction covers not just tax savings – registering a company in Cyprus allows you to make a global decision to improve the financial efficiency of the business;
- Tax incentives are provided for all types of legal entities and individuals, regardless of the scale of activity.
- corporate tax at a zero rate may be applied to trading companies on profits from the sale of shares/bonds, CFDs;
- dividends/royalties/interest directed from the territory of the Cypriot state are not taxed (including payments to non-resident shareholders) without a minimum threshold of non-taxable income;
- the profit of a Cyprus company from debt obligations fulfilled in any country in the world is not taxed;
- businesses with a real economic presence can use the provisions of the DTT to avoid paying taxes twice (at the moment, about 40 new agreements with third countries are under development);
- up to 50% of interest income that is sent to the final recipient by a Cyprus company is exempt from 12.5% tax;
- Personal income tax in Cyprus cannot exceed 30%, up to 20,000 EUR of income – a non-taxable threshold;
- registering a company in Cyprus is beneficial due to the complete absence of taxes on wealth, inheritance, capital gains;
- there is no currency control, free movement of capital from investment transactions with non-residents of the republic is allowed;
- full access to current EU and OECD directives;
- earnings of foreign employees of companies located offshore are not subject to personal income tax;
- there is no legal framework for CFCs (controlled foreign corporations).