What is Residency? When we talk about residency for tax purposes and you only live and do business in one country the rules that apply are very simple. If you are a resident of Canada (you live there) Canadian tax rules apply. As you start to do business in multiple countries, have customers elsewhere,…
Inheritance tax in the UK is the tax that one is liable to pay on any assets which a deceased person has passed on to a legal heir or inheritor. These assets could include property, money, investments, vehicles, payouts from life insurance policies, and any other possessions. When a person dies, the government estimates the…
Things to consider when building an international structure It’s very important thing to note from the beginning that there is no one size fits all structure for a business, investment, operation, etc. Every case is different and there are lots of things to consider: Who are the owners? Who are the customers? Where are the suppliers? What type of business is it? Where…
What is “Withholding Tax”? Most people only think of one, in some cases two layers of tax. In fact, we generally, have three layers of tax to consider whenever we’re doing international tax planning and structuring. The first layer is corporate income tax, which is what most people are trying to reduce by going to a low or zero…
What is “Taxation Basis”? Taxation basis in simple words means – which portion of your income is the country going to tax. The two most common you will hear about are worldwide income taxation and territorial taxation. There are few other forms of taxation basis that are not so common, including zero tax and remittance or blends of these. …
What is “Transfer pricing”? Lots of people have the idea of setting up an offshore company in a low or zero tax jurisdiction and then charging the original company (that’s in high tax jurisdiction) with management or marketing fees (or similar fees). Well, there are rules against doing this. These rules are called “transfer pricing rules”. If you are…
What are CFC Rules (Controlled Foreign Company rules)? There are lots of misunderstandings when it comes to CFC rules (controlled foreign companies rules) and CMC rules (management control rules, part of Corporate Residency Rules). Lots of people get confused about which is which. You have to pay attention to both. However, not every country has them, some countries will have CFC but…
What Does Source Income Mean? Today we’re going to learn about “income source”. Have you heard about territorial tax systems? What it means, in theory, is that they only tax you on your locally sourced income. By contrast, some countries will tax you on your worldwide income, meaning you pay tax on everything you make everywhere. (For the difference see taxation basis) Most places will tax…
A friend just reached out to me who is thinking about quitting his job and becoming a digital nomad or at least shifting his work to being location independent. He figured “I’ll set up a company in a low tax country then eventually change my residency”. This is the sort of thing we hear all…
