5 Reasons Why International Tax Planning is Crucial for Offshore Company Formation?

The ultimate goal of an international tax planning is naturally a significant reduction in tax liability. Legal elimination of your taxes may not be possible, and rightfully so, but you can certainly cut down the taxes to such an extent that you won’t feel you are paying any taxes. This is obviously your ultimate aim when you go for international company formation with registered office and to help you with this you need a competent law firm or an accounting company on your side. Let us take a look at 5 reasons why it is important for you to plan your international taxes when it comes to offshore company formation.

1. Offshore Banking Accounts: For registering and establishing an offshore firm, one of the important criterions is to have a company’s offshore bank account. Tax haven nations are loved by such firms as it easily allows them holding funds with guarantee that the owner’s profile won’t get divulged to the government or to the public through the strictest secrecy laws of the banks. If this is the most important aspect for the company owner, then it becomes important to consider all different countries that suit such requirements.

2. Capitalization Rules: One of the other advantages that company looks for in tax haven nations is their capitalization rules. These nations normally offer very thin capitalization. Due to this there is very restricted scope of debt finance. In one way, such rules of capitalization help international tax planning as they become more appealing to multinational firms that are largely dependent on the capital funds raised by their shareholders. This way they feel more protected against any type of possible debts.

3. Choosing the Right Tax Haven Nation: This is one of the most important considerations that you should make. Some of the most popular choices are Bahamas, Monaco, Malta, Isle of Man, Cyprus, Switzerland, Gibraltar and Andorra. All these nations offer various favorable conditions for the offshore formation of your company. That being said, it is important that all the advantages are carefully compared before choosing one of these nations. You should take a close look at the financial, telecommunication and banking industries in these nations before you make a move.

4. Preparing Income Tax Returns: Business people don’t want to worry about preparing for tax returns. International firms find it very cumbersome to prepare their tax reports, which is necessary to be filed to the government. If these reports are not submitted on time, the companies could run into a lot of trouble. This is why it is important to hire a reliable agent who can take care of such works with precision and more importantly without any delay.

5. Double Tax Treaties: These are very advantageous to companies as these treaties are entered into by the government with other nations and give the companies ore opportunities for saving on foreign taxes and trading expenses. This happens due to an international tax legislation that the two countries agree upon. The efficient cross border taxes help these firms save on personal income taxes, corporate income taxes etc.
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Author Bio
Terry Novik is a tax planning professional with over 10 years of experience, who helps businesses, companies and individuals with their tax filing.

Tips on Finding the Right International Tax Accountant

It is critical to find the correct international tax accountant who will meet your tax obligations properly, provide great tax planning and avoid tax audits. This article, written by an international tax accountant in Toronto, provides useful guidelines on finding knowledgeable and experienced international tax expert.

1. Examine Your Needs

In order to find the right tax accountant, it is important to know which country’s tax laws will need to be complied with and what kind of services you require. Do you need to hire an international tax accountant in Toronto, Canada or in a different part of the world? Do you need an accountant to simply prepare your tax returns or do you need someone that is specialized in a specific area such as self-employed individuals, small businesses, and real estate? Given that different tax accountants have expertise in different tax fields, it is crucial that you select a tax accountant who will be best suitable for you. When you are aware of the services that you require, embark on your hunt. Get hold of reliable recommendations and create a list of prospective accountants. 

2. Enquire About Their Tax Field of Expertise

When considering potential accountants, you should inquire questions in-depth. It is crucial that you spend enough time and effort in selecting a tax accountant. Find out whether the services provided by the accountant fulfill your needs and whether they have the qualifications and experience necessary to accomplish the task effectively. It is important that you hire someone who is specialized in the area you need help with and has a lot of experience working with your kind of business or individuals in similar tax situations as you

3. Verify References

In order to ensure you obtain the right professional, you should always contact the references provided by the potential accountant. Speaking with a few of the candidate’s references, such as current clients, will generally able you to determine aptness of the candidate with a high degree of precision. The time and effort put into verifying the references will be rewarding in the long run.

4. Personal Relationship with the Accountant

When taking a tax accountant into service, think about whether you are comfortable with and trust this individual as they will be working with important financial data. As well, confirm if the candidate communicates well with you and completely answers all your questions. Easy and transparent communication is a must between the accountant and client!

5. Accounting Fees

Obtain an approximate fee for the services to be provided from the remaining candidates. Compare the different quotes and choose the accountant who has the qualifications and experience to accomplish the job effectively within your set budget!

Please visit madanca.com/Services/US-Canada-Tax-Accountant-Toronto to read more articles about international tax written by an accountant in Toronto.

About the Author

Allan Madan, CPA, CA, is an international tax accountant located in Toronto, Canada. Allan helps his clients with tax compliance, foreign reporting, withholding tax and inbound and outbound tax planning.