The globalization of businesses has opened new opportunities for the investors as well as the invests. One thing that is the main source of concern for various international investors is tax issues. Therefore, they plan ahead so that they can follow fair and legitimate tax regime.
Here are some international tax planning tips that can help you out in the process.
Tip # 1 – Operating Expenses
If your operating expenses are planned ahead of time then you will face less financial losses, which in turn will result in less tax losses.
Tip # 2 – Tax Trends
If you want to devise a favorable tax scenario, then you need to analyze the tax trends of every country. Only then will you be able to take sound business decisions. Check PWC publications of tax trends to stay updated
Tip # 3 – Business Strategy
Make sure your business goals are designed to incur low taxes.
Tip # 4 – Tax Credits
Make use of tax credits. They will decrease your basic tax liability and will help you survive in tough financial situations. This is a very simple yet efficient international tax planning tip.
Tip # 5 – Distribution Operations
If you are operating your business in a country that has high taxes, then you should think about distribution operations. This way the risks and functions are both reduced for the distribution company, which in turn reduces the taxes as well.
Tip # 6 – Deferring Tax Payments
You can lower the tax payments by adopting strategies to defer them, which does not mean you should get past the date of tax payments. You can defer the payments by reinvesting in your company in an offshore account. This international tax planning tip can save you a lot of money on taxes!
Tip # 7 – Transferring Assets
You can transfer your income to taxpayers to reduce the tax burden. For example, by transferring your assets to your children you can reduce the tax payment amount.
Tip # 8 – Mode of Investment
Every object has its own mode of taxation. For example, taxes on property are different from taxes on cars. If you want to make an international investment you can find out which form of investment will land you with the lowest taxes and then invest accordingly.
Tip # 9 – Changing Legal Forms
By changing the legal form of the business you can sometimes get more favorable taxation chances. This way you get the chance to deduct the federal level of corporate taxes.
Tip # 10 – Tax Jurisdictions
With international dealings, you get the chance to choose your tax jurisdictions. For finding the one international location that best serves the need of your organization, you will have to conduct a thorough search and find out which country’s tax jurisdiction is the most beneficial for you. That can happen only if your business is mobile in terms of changing jurisdictions.
We hope that these international tax planning tips will prove beneficial for you when you are in the process of setting up an offshore account or making international investments!
Jason is a business consultant at KSA Public Accountants from Cyprus, working in the international Tax planning department