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How to Evade tax Method - 100% Legal - Moral? Not so much

Discussion in 'Business & Tax Advice' started by Reyone, Mar 20, 2013.

  1. Reyone

    Reyone Elite Member

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    Before you start reading I would like to state the following:
    A- I do not approve it (morally).
    B- I think it is not fine to do it by any means.
    C- I am simply sharing information which I have gathered through different sources.
    D- I am not responsible for any of your actions if you decide to undertake this method.
    E- Once again, this is plain and simple information, use it at your own risk and do NOT pm me in regards of it. I will not provide advice to anyone asking for it.

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    Hello and Good morning BHW,

    It has been a while since I joined the forum, and ever since, I have been reading quite a lot of threads about tax dodging, how to do it, who could do it and tons of threads saying, NO YOU CANNOT.

    Well, today I would like to share this information with you all and show you that it is not only very possible to do it but to show you that many companies are currently doing it.

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    How is this possible and how does it work:

    This is very simple and straight forward. The method is based on the double taxation treaty, a treaty which was created in the UK and which includes a ton of countries. The treaty simply states that if you are taxing your income (of any shape or form) in any of the countries listed in the treaty, you do not need to tax it within the UK - as long as you have previously taxed it in any of the listed countries -

    Now, lets think about that for a second. It is a great way of saying, we are not going to fuck your ass and make you pay 40% corporation tax in the UK if you are already paying 25% corporation tax in Spain; you tax it there and we will not make you tax it within the UK. Fair enough, sounds good and nice.

    Well, by now you must have figured it all out in your head... Yes... if you have your income arriving to a country with 0% corporation tax you are technically paying taxes within that country; once you move it to your UK bank account, as that money has already been taxed, you receive it in full and you do not need to tax it.

    Note, you still need to pay for your workers taxes, but honestly, who the hell cares? You pay those based on their salary, so it is even beneficial for your company and it will make it look at lot more legit.

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    The method:

    1- Open a limited company within the UK.
    2- Open a limited bank account within the UK.
    3- Open a limited bank account in any of the countries listed in the double treaty.
    4- Set all of your profit to land to your bank account located in the country under the double treaty.
    5- Move it back to the bank account within the UK.
    6- Done.

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    Some of the biggest companies who have undertaken this method:

    This is not 100% accurate information, so the companies that I am listing bellow are simply based on the information I have gathered from different sources.

    - Facebook
    - Starbucks
    - Google

    These companies usually bank money in their beautifully sealed and 100% private banks in Swiss. Although they need to pay a small amount for taxes, they still manage to evade a big ass %.
    Along with these ones, there are TONS of companies who use this method.

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    Moral issues, Technical constraints and Personal opinion:

    Personal opinion:

    I personally think the double taxation treaty is an amazing tool to help all those who actually need to tax their income in other countries. Furthermore, an individual might choose to open a ltd company within the UK but might choose to live in other country; I see it as something positive as this person might want to benefit the country under which he/she is living rather than the country where the company is based.

    Technical constraints:

    Think about it, you are depositing your money in a bank where you might not receive tax. You are going to need to pay some big ass $$$ to the bank; not only that, but you are going to be very economically insecure. Have you guys read the recent incident in Cyprus??? ...
    Is it really worth it to having to pay your international lawyer, a good ass accountant and the fees not only for the bank but for the money transfers while having a big sense of economical insecurity?
    Yes, you will make more money, but you will be rejecting to benefit your country, you are living there and benefiting from the roads and the parks yet you are not paying shit for it? Fucked up if you'd ask me.

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    That is all fellow BHWers.

    Think about all the sides before you decide to take a step into this world of greed and think if it is really worth while.

    Have you though how good it would feel to benefit a country massively while earning good tanks of money? Being truthful and legal and being able to smile and not having to hide anything is far more positive in my opinion.

    Best of luck to you all no matter what you choose to do in life.

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    ?Always do what is right. It will gratify half of mankind and astound the other.?
    ― Mark Twain
     
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  2. seoguy81

    seoguy81 Power Member

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    Interesting thread. Yes, companies like Google/Yahoo and so on have shell companies in Netherlands due to their low/lax tax policies thus helping them save tons of money that would otherwise been have taxed on UK soil.

    In terms of morality, it depends on how you look at it. If the govt. has put in a double tax treaty and you abide by it, technically you aren't on the wrong side.
     
  3. Reyone

    Reyone Elite Member

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    If the government would say raping kids was fine by law, would you consider it technically right?

    It it not about what the government says, it is about you and how you deal with the world.
     
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  4. misterawesome

    misterawesome Registered Member

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    Wrong. Wrong. Wrong.

    Bad, bad info. This is not how these companies you have mentioned reduce their tax liability.
     
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  5. meathead1234

    meathead1234 Moderator Staff Member Moderator Premium Member

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    Lol, this is shocking advice and not even close to being accurate.

    I stopped reading after you said the UK has 40% corporation tax. I'm pretty sure we haven't had that rate for many, many years.
     
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  6. Parkway

    Parkway Newbie

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    Inaccurate information aside, the income tax is actually unconstitutional to begin with. So morally, I guess it depends how you define your morals.
     
  7. zebrahat

    zebrahat Elite Member

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    You mean, the US income tax as it is implemented and (mis)applied is unconstitutional. You have to be precise in the language, that's how deep the truth has been buried, otherwise some tax drone can come back with "what about the 16th amendment?" Taxing with apportionment public officers or those receiving government privileges, who are domiciled in DC or the federal territories IS positive law and IS within the constitutional power of the government.

    This class of people who are subject to mandatory payment is a tiny fraction of the American population. There is no positive law requiring most Americans to pay or file income taxes, but the IRS enforces the tax code under the presumption that everyone is under the requirement, and is subject to their jurisdiction. That's the problem.
     
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  8. mrorzio

    mrorzio Regular Member

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    Tax is for a purpose.

    They write the code and your job is to find out how it applies to you.

    If you are smart or know someone smart and utilize the code to pay less then you are not "morallY" doing anything wrong.

    Just my take on it with the quickness.

    I believe in tax breaks for those that are: giving more jobs, growing industry etc..
     
  9. Parkway

    Parkway Newbie

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    Yes very well said. Then when you consider what they actually spend our tax dollars on... which is a whole different story.... it's hard to ever feel "morally" wrong if you find a loophole etc.

    And don't get me started on the "federal" reserve.
     
  10. Parkway

    Parkway Newbie

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    I disagree that it needs to be your job. They write it incredibly misleading for a reason then you have to dig into it to find out what it actually means.

    This is nice in theory but generally the big corporations are given tax breaks because they are in the pockets of gov officials.
     
  11. infoasian

    infoasian Supreme Member

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    This information is misleading and incorrect. Yes one can save on operating costs. Taxes are nothing else but operating costs as countries provide infrastructures. So there is no moral aspect to it at all. It's all business imho. However, you need to turn over substantial amounts of money before this works in your favour as you need to do more than just build shell companies. You do need to operate in those countries and pay substantial fees. It's like another 10% invisible tax.
     
  12. Reyone

    Reyone Elite Member

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    What is misleading and incorrect? Be specific if you are going to present a critic on my post.
    "Its all business imho" In my opnion, correct? Nothing is just business and nothing is just morals, I believe things are well mixed up in life and it all depends on your personal view.
    My view is that benefiting your company by using any tax evasion method is not morally right as I believe you should benefit the country where you are living.

    Starbucks does. I did assume the other 2 did it the same way; reason why I mentioned that was not 100% accurate information.
    Would you care to share how do they do it? I would like to know.
    Thanks

    1- It is not an advice.
    2- Yes, you are right, I mentioned 40%, it is not 40%, Ive been paying 20% for the profit generated. Apologies for that mistake. You pay 23% over 300k earned.
    3- The tax evasion "method" is correct and it works.

    If something else is wrong it would be great for you guys to discuss it so I could make changes to the post. At the end of the day, I just wanted to share the double taxation treaty and how it can be used to evade taxes.
    Thank you all for making those points
     
    Last edited: Mar 22, 2013
  13. zenoGlitch

    zenoGlitch Executive VIP Jr. VIP Premium Member

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    Ask yourself these 3 questions.

    A. Do I use this info and put it into action?
    B. Has this been successful for me in the past or present?
    C. Do I have a birds eye view of the advice I am giving?
     
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  14. GreenGoblin

    GreenGoblin BANNED BANNED

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    I never understand why people want to "try" to get over on the government ...I mean of all the organizations out there you gonna try to pull a stunt on, The government? THE US GOVERNMENT?? LMAO good luck!
     
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  15. tomsko

    tomsko Regular Member

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    I guess you could get through with small relatively small numbers
     
  16. BHopkins

    BHopkins Moderator Staff Member Moderator Jr. VIP

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    This is bad advice all around. You really need to find a good account. This is most likely considered tax fraud since the money was earned in your country. Just because your bank account is in a different country doesn't mean your business is in that country.

    That stuff worked in the 1960's, not today.
     
  17. peppe

    peppe Regular Member

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    with a little bit of research you would realize that google has a office in ireland, with the purpose of low tax evasion
     
  18. phatzilla

    phatzilla Supreme Member

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    Wow, thats the first time i've heard of a company who wants to pay more in taxes!
     
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  19. semfiguras

    semfiguras Newbie

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    Hello,

    First there is no double taxation treaty with a country that has 0% corporate tax.

    Second this can only work with a non fisical (store) business. if you have a online business you can get your company in a low tax or no tax country, but all those country's are blacklisted and it's very expensive to get a merchant account or even a bank account (operations taxes)

    What everybody is doing for a long time is having a IBC holding on a tax heaven and incorporating expenses on the local (from the holding) company to diminish the profit and therefor the corporate tax. Foundations are also used in this formation.

    But it's getting harder to mount a good formation because of the black listed country's
     
  20. DeniX3

    DeniX3 Regular Member

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    There is an other way of avoiding taxes, but i think if you use whitehat longterm methods you should just pay the taxes.

    Even jesus said this back than. ;)

    I know some people think they can avoid taxes and its morally ok, because the gov just use that money to buy weapons which kill people or buy some cars for the politicians.

    Dont forgot that every person will be judged for the things he/she has done in his/her life and its nor your fault if they do something bad with that/your money.