APGI - Overseas Taxation
At APGI we feel that educating our clients is the key to their success. In doing so we have compiled information concerning offshore taxation , local taxation, worldwide tax rates, tax havens, as well as limited liability companies. We have spent hours to compile this information in order to provide our clients with needed educational materials in order for them to make the best possible choices when setting up an overseas structure. Please do not consider this information as legal or tax consultation. If you should need professional tax advice we suggest that you speak to your local tax advisor or legal counsel.
Click here to see the Worldwide Tax Chart
Offshore Tax Information
The Complicated Issue Of Offshore Tax
Offshore Tax is a tricky subject as there are many different ideas as well as interpretations that can only benefit a company if properly used. These Tax laws are put into place to protect both the business by legislation put into place by the government it is registered under. Without these laws many countries would miss out on millions of dollars in needed funds which the offshore industry provides.
First off we need to discuss how taxing works. If you start a company in the United States, any money your company makes will have to be taxed. This tax pays for things like infrastructure, cops, and defense. So whenever a company is founded it has to register under a country. This means the company has its headquarters in that specific country and thus falls under the laws of said government.
Many companies choose to move offshore because production and manufacturing can be much cheaper in other countries. Also, the corporation may be trying to expand their products as well as capital and may use a tax haven as a way to do so and obtain entry into foreign markets. The only book keeping or record keeping in most tax havens is limited to the payment of annual fees to the registrar. Of course if a business physically conducts business in another country there may be fees they have to pay there as well.
The problem with using onshore taxation in lieu of offshore tax arises when an onshore business starts a dummy businesses and uses that business to try to obtain tax breaks. These offshoots are on paper their own entity but in actuality owned by a previously existing business or someone connected to that business. The question is which country gets to tax that business.
This is why many companies who are starting out will establish their first operation in a different country. This new nation may have lower tax rates and fees. After the country of origin is established, the corporation will usually expand to first world countries where the consumer base is much more affluent. But because they are based somewhere else, they pay much less in taxes.
In many cases, offshore entities are established for taxation purposes in order to either reduce or in some cases eliminate taxation all together. It is the position of APGI, S.A., to express to our clients that they should pay taxes in their home country and they should not abandon completely their economic duties to the society in which they live in. Many offshore service providers actually boast offshore tax issues as completely tax free as well as they promote the idea of getting over on the government of the country in which you reside. APGI, S.A., however believes that each and every one of us has some obligation to our country and we should at least pay something per year in order to fulfill a moral obligation.
Ways to Reduce Your Tax Load by Using Offshore Tax Strategies
One can take advantage of offshore tax planning and structuring by using several different methods such as the incorporation of an offshore entity, receiving funds on an offshore account, as well as taking advantage of tax treaties, which exist between several different countries. For example, there are certain tax treaties, as well as agreements between the United States and Cyprus, which can reduce or eliminate capital gains taxes in a legal and ethical way. Other ways of taking advantage of offshore tax advantages can include incorporating an offshore entity in a tax-free jurisdiction or a jurisdiction in which taxes are extremely low. Some examples of such types of jurisdictions are Belize, Cyprus, Seychelles, Panama, and many others
Current Worldwide Tax Rates
We have put together a list of some of the world`s major countries and their tax rates.
| Country | Corporate Tax Rate | Individual Tax Rate | VAT/Sales Tax |
|---|---|---|---|
| Argentina | 35% | 9-35% | 21% |
| Australia | 30% | 17-47% | 10%GST |
| Austria | 25% | 21%-50% | 20%GST |
| Belgium | 33.99% | 25-50% | 21% |
| Brazil | 34% | 15-27.5% | 17-25% |
| Bulgaria | 15% | 10%-24% | 20% |
| Canada | 36.1% | 15-29%(Federal) | 7% |
| China | 33% | 5-45% | 17% |
| Cyprus | 10% | 20-30% | 15% |
| Czech Rep. | 24% | 12-32% | 19% |
| Denmark | 24% | 38-59% | 25% |
| Egypt | 40% | 20-40% | - |
| Estonia | 23% | 23% | 18% |
| Finland | 26% | 9-32.5% | 22% |
| France | 33.33% | 10%-48.09% | 19.6% |
| Germany | 25%(federal) | 15-42% | 16% |
| Greece | 22/29% | 0-40% | 19% |
| Hong Kong | 17.5% | 16-20% | - |
| Hungary | 16% | 18-36% | 20% |
| India | 30-40% | 10-30% | 12.5% |
| Indonesia | 30% | 5-35% | 10% |
| Ireland | 12.5% | 20-42% | 21% |
| Israel | 31% | 10-49% | 15.5% |
| Italy | 33% | 23%-43% | 20% |
| Japan | 30% | 10-37% | 5%(consump) |
| Latvia | 15% | 25% | 18% |
| Lithuania | 15% | 10-35% | 18% |
| Luxemburg | 29.63% | 6-38.95% | 15% |
| Malta | 35% | 15-35% | 18% |
| Mexico | 29% | 3-29% | 15% |
| Monaco | 33.33% | 0% | 19.6% |
| Morocco | 35% | 0-41.5% | 20% |
| Montenegro | 15% / 20% | 0%-24% | 17% |
| Netherlands | 29.6% | 0-52% | 19% |
| New Zealand | 33% | 0-39% | 12.5% gst |
| Norway | 28% | 28-51.3% | 25% |
| Pakistan | 35% | 7.5%-35% | 15% |
| Philippines | 35% | 5-32% | 10% |
| Poland | 19% | 19-40% | 22% |
| Portugal | 27.5% | 10.5-40% | 21% |
| Romania | 16% | 16% | 19% |
| Russia | 24% | 13% | 18% |
| Saudi Arabia | 20% | 20% | - |
| Serbia | 10% | 10%/14% | 18% |
| Singapore | 20% | 3.75%-21% | 5% |
| Slovakia | 19% | 19% | 19% |
| Slovenia | 25% | 16%-50% | 20% |
| South Africa | 29% | 18-40% | 14% |
| Spain | 35% | 15-45% | 16% |
| Taiwan | 25% | 6-40% | 5% |
| Thailand | 30% | 5-37% | 7% |
| Turkey | 20% | 15-35% | 18% |
| U.K. | 30% | 0-40% | 17.5% |
| U.S.A. | 35% | 0-35% | - |
| Vietnam | 28% | 0-40% | 10% |
| Zambia | 35% | 10-30% | 17.5% |
