How can someone take advantage of international discrepancies between tax rules?
How can someone take advantage of international discrepancies between tax rules?
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Some people have exploited international discrepancies between tax rules by making use of tax havens. These are places with lax or absent tax laws, which allow people to stash their money and pay little or no income taxes. To prevent abuse of this practice, governments and international bodies have put into place measures such as reporting requirements to monitor large sums of money leaving or entering a given country.
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How can someone take advantage of international discrepancies between tax rules?
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International discrepancies between tax rules offer opportunities for those wanting to take advantage of unfavorable legal and regulatory environments in other countries. Many international companies exploit these differences by taking advantage of loopholes such as mismatches in timing or definitions, to minimize their tax liability outside their home country. For individuals, this can be done through the use of offshore havens, holding companies, and transfer pricing – arrangements that relocate income from one country to another with a lower tax rate. Taking full advantage of these loopholes requires knowledge and experience, so working with the right professionals is important to ensure that a business isn’t exposed to legal action as a result of attempting these strategies themselves.
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