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Opening an Offshore Bank Account for Tax-free Reinvestment Funds

Discussion in 'Business & Tax Advice' started by Apsconsus, Feb 10, 2017.

  1. Apsconsus

    Apsconsus Registered Member

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    Hello everyone, I've got a quick question that I would appreciate some advice with.

    I'm currently doing amazon affiliate and I've earned a couple of hundred dollars in my first month. I want to completely reinvest this amount and was wondering if it's possible to set up an international bank account in a tax free country for this purpose.

    The idea being that if I send money to myself here in Australia, I will of course pay tax on it, but for the money I want to reinvest I keep it in an offshore account and do not pay tax.


    Is this possible and viable? I've been looking online for an answer but have yet to come across one yet.
     
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  2. mirrorer

    mirrorer Jr. VIP Jr. VIP

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    No need to risk that.
    Open a company in your country.Spend all the money you earn.Since you pay tax on net profit,you will pay nothing technically speaking.
     
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  3. Apsconsus

    Apsconsus Registered Member

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    Just so I understand, do you mean that I can claim the expense as a business expense?
     
  4. mirrorer

    mirrorer Jr. VIP Jr. VIP

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    Exactly.
    When you have a company,you pay taxes on net profit only
     
  5. frenchboy

    frenchboy Power Member

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    You can reinvest this money tax free if you spend it on business expenses by the end of the year. No need to do anything except get a 50$ accountant one time when you do your taxes.
     
  6. TheNumbersGuy

    TheNumbersGuy Jr. VIP Jr. VIP

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    Just to make sure I understand your question. You earn money as an amazon affiliate, some of the profits you make from this you pay to yourself and some of the profits you would like to keep in the business for reinvestment purposes - also what would you be reinvesting in (day-to-day operations, stock market, etc.)?
     
  7. Apsconsus

    Apsconsus Registered Member

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    Yeah correct.

    Ah I'd probably reinvest by buying some link packages, content or even a new site to expand
     
  8. mlg131

    mlg131 Junior Member

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    Do you get paid into a paypal? and is that paypal in your real name and/or linked to your bank account? if so pretty sure the ATO is on to that now
     
  9. Apsconsus

    Apsconsus Registered Member

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    It's all good, I have not been paid yet, and amazon only have the option for it to go to your bank.


    Thanks for the advice guys, I'll just claim it as business expense
     
  10. W9go

    W9go Jr. VIP Jr. VIP Premium Member

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    you can also subtract your computer, mobile, software, internet and telefon cost and so on ....
     
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  11. infoasian

    infoasian Supreme Member

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    Unless you make 6 figures offshore accounts never made sense. They are expensive in fees. In addition, most offshore banks are obliged to report your account to the Australian fiscal authorities should they know you have an Aussie residence. It's a new, global banking regulation.
     
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  12. TheNumbersGuy

    TheNumbersGuy Jr. VIP Jr. VIP

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    Just looking at BVI corporate tax law - you would be "[e]xemption from all local taxes for BVI Business Companies conducting business outside of the BVI" - meaning that all profits you have from operating your business should be exempt from tax as they are not generated in the BVI. However, when you are paying yourself out money you need to make it an inter-company loan or some expense you must pay to your other corporation to avoid payroll taxes.

    This is just my understanding of the law - I am no tax expert for BVI so I would consult with a tax accountant in the BVI or another tax saving haven.

    Sources: "https://www.apintertrust.com/offshore_company/bvi_tax_haven.htm","https://en.wikipedia.org/wiki/Taxation_in_the_British_Virgin_Islands"
     
  13. kekmaw

    kekmaw Junior Member

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    A offshore company doesn't mean anything is tax free which is a HUGE missconception.
    The only thing a offshore company generally does is that it is exemt from local taxes in the country where it is registered. That doesn't mean that it's not tax liable anywhere. If OP lives in Australia and works from Australia, his offshore company is liable to be fully taxed in Australia. Offshore companies aren't that usefull for people who are effected by CFC rules. If you have moved from such country, you are much more free and you're able to use offshore companies to a greater extent.
     
  14. TheNumbersGuy

    TheNumbersGuy Jr. VIP Jr. VIP

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    Yes you are right he is liable for taxes in Australia, however if he structures his company properly, and is not a employee of the corporation in BVI there would be no tax liability in Australia. Corporations are legal entities and are subject to only their jurisdiction, that being said - the corporation operating in BVI would be subject to BVI tax law not Australian. If the company registered in BVI is operating the business and he owns a company which is in Australia ( which owns 100% of the company in BVI), he wouldn't owe taxes on the BVI company in Australia. Taxes would be due when funds are brought into the Australian company.
     
  15. RuthSam

    RuthSam Jr. VIP Jr. VIP Premium Member

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    OP, this is not going to work. The bank has to report your account! Only viable way is to keep the money on a anonymous created wallet and do your investment from there!
     
  16. TheNumbersGuy

    TheNumbersGuy Jr. VIP Jr. VIP

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    Go talk to a local accountant and ask them if you can set up a company in both Australia (company A) and a tax haven (company B). What would be required for you personally if the tax haven company (B) was owned entirely by the Australian (A) one and you own the Australian one. Company A would pay you personally your income (hence you would record this as employment income). Company B pays consulting fees to Company A for running the company, all other profit earned by company B will remain in the corporation for further reinvestment.

    I am unsure what the tax implications would be one company A, however, I believe you wouldn't be personally liable for more taxes.

    If you try this I would be very interested in what your local accountant says.

    Cheers
     
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  17. Capo Dei Capi

    Capo Dei Capi BANNED BANNED

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    Australia has CFC rules setup to prevent that kind of activity.

    https://www.ato.gov.au/Forms/Foreign-income-return-form-guide-2013-14/?page=3
     
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  18. Asif WILSON Khan

    Asif WILSON Khan Executive VIP Jr. VIP

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    OP it doesn't look like you are earning enough for this to be worthwhile. You can certainly reinvest that money as you possibly won't even owe Tax on it yet.
    You can probably earn a few thousand without owing tax, check the regs for your country.
    If you really want to minimise your Tax then consult a professional, look for an Accountant.
    When you start earning a decent amount then you can create a registered company and pay yourself a nominal salary then the company can pay dividends to you.
     
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  19. RayWilliamjon

    RayWilliamjon Newbie

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    Dude you seem really educated about anonymous bank accounts, do you know where I can get an anonymous account to withdraw funds from an adsense account? and do you have an email or something that I could use to contact you (not twitter) because I uploaded 2 tv episodes and made a bit off them.
     
  20. RuthSam

    RuthSam Jr. VIP Jr. VIP Premium Member

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    Sorry dude, can't help you with that..