cryptohunter
Active member
- PPF Points
- 1,390
Offshore companies and bank accounts can help reduce tax liability in several ways:
- Tax Haven Jurisdictions: Offshore companies can be incorporated in jurisdictions that have low tax rates or tax exemptions, known as tax haven jurisdictions. By doing so, the company can potentially reduce its tax liability by taking advantage of the lower tax rates or tax exemptions in these jurisdictions.
- Transfer Pricing: Offshore companies can also use transfer pricing to allocate expenses and revenues between different entities in a way that reduces tax liability. This involves setting prices for transactions between related entities in a manner that reduces taxable income in high-tax jurisdictions and increases taxable income in low-tax jurisdictions.
- Double Taxation Treaties: Offshore companies can also benefit from double taxation treaties between the jurisdiction where the company is incorporated and other countries. These treaties can help to reduce or eliminate double taxation, allowing the company to keep more of its profits.