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International Tax Planning

International Tax Planning

International tax planning includes various instruments, charts and corporate structures that allow businesses to obtain tax savings using institutions directly prescribed not only by national legislation but also by international tax agreements.

The application of methods of international tax planning is based on the registration of individual business units in various foreign jurisdictions where businesses can obtain benefits and preferences that arenot prescibed by the national law.

Korpus Prava provides the following services:

  • Selection of the jurisdiction with an aim to register an offshore company;
  • Building an international holding structure for optimisation oftaxation;
  • Registration of offshore companies (and their subsequent maintenance);
  • Accompanying services;
  • Consultation and development of business charts using various tax advantages.

When optimising taxation of group’s certain types of income, different international tax planning opportunities are used. In this case, we are talking about the following income groups:

  • Operating income

Reducing the total income tax burden generated from operational activities is reached by creating profit centers in those foreign jurisdictions where the income tax rate is lower than the national rate.

  • Income from using the assets

Optimisation of taxes levied on income from using the assets, income from the sale of shares, dividends, interest rates and royalties is exercised through international agreements on avoiding double taxation. There are around 40 tax agreements made between Cyprus and other high tax jurisdictions, including the Russian Federation.

  • Dividends, interest rates, royalties

Using international tax planning methods is particularly effective when optimising total tax liabilities of a holding company; however, individual companies may use them as well. These methods can be used when planning tax implications of a separate business activity (for instance, when paying dividends or interest) or when optimising total tax liability of a company or a holding company.