The protection of assets and offshore trusts. Who will catch up and who does not?

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Offshore asset protection via trusts

Every Orlando reader is already familiar with OECD. These four letters hide in themselves not only the importance of organizing economic cooperation and development but also a direct reference to the apparatus in the fight against global tax planning. Every day more and more actions are being taken to combat offshore jurisdictions. Initially, all actions and laws were taken under the auspices of combating the most severe taxpayers, and now this is a project to implement the rules of one single global tax convention and eliminate zero taxation.

Less than a month ago, the OECD presented its global action plan to counter the erosion of the tax base and the movement of profits (BEPS). This plan is not just another document preventing tax evasion, but a global proposal approved by the G20, which will fundamentally change the current system of double taxation.

OECD swung to change the tax system beyond recognition. Let’s just say, step over to a new stage of development, which will help governments of the state to keep modern economic and financial systems floating, which since the beginning of the 2008 crisis, are becoming more and more uncontrollable and out of control.

But, in spite of all the OEDS intentions to transform the modern tax system, this idea is not one of the simplest and most easily implemented. What about the rest of the countries that exist precisely due to the proposal of favorable taxation. It turns out that after enriching the treasury of large and sufficiently strong states that are not developed in one or two business areas, other states will simply be on the verge of bankruptcy when they can no longer offer favorable taxation for foreign investors. It is unlikely that all states will so easily and voluntarily agree to give “their own bread” in the name of justice. In addition, the creation of a new global tax system can not be a cheap event. It will certainly require significant administrative costs and painstaking bureaucratic work.

The idea of a newly created plan is not to make everyone pay at one rate, but the plan should protect pay where the rate is lower. Do you ask how you plan to achieve this?

In the first place, in accordance with the BEPS plan, it is planned to abandon bilateral tax treaties currently in force in favor of one single general convention. Today, these agreements are like a link between numerous countries and the more agreements a country has signed, the more promising it is to conduct business activities through a specific jurisdiction. Today in the world there are about 4 thousand agreements that are the basis of international relations for many countries. However, the OECD proposes to abandon these agreements and introduce one single convention to which everyone can join. But numerous experts do not believe in the success of this convention since there are a huge number of countries with preferential relations that have been created for many decades, which are based not only on international relations but on the long history of countries. This means that these countries will never abandon their agreement.

In addition to the above, the plan implies by 2014 to develop and introduce recommendations on the rules for deducting various expenses, revising approaches to transfer pricing, and tightening the rules for taxation of profits of foreign-controlled companies. These recommendations will oblige international companies to provide full reports on the distribution of economic activity, income, and taxes paid separately for each country of presence.

“The French government fully supports the ambitious approach developed by the OECD. I insist on applying this plan entirely. Its fragmentation is unacceptable. We hope that the G20 will accept this plan, ”said French Minister of Finance and Economy Pierre Moscovici. “This is about tax justice. This is a question of the legitimacy of the global economy. If we do not distribute the tax burden fairly, then the global economy will be destroyed, ”said German Finance Minister Wolfgang Schäuble, supporting him.

And it is not surprising that the governments of European countries are “behind” with both hands because there is no money in the EU, like in other countries. At Orlando, we have already told you that the global financial system is on the verge of bankruptcy, and this is proved by the figures of the largest Central Banks.

The difference between assets and liabilities is the capital of the Bank. And this is an important indicator, since the higher the capital, the healthier the bank. For example, Lehman Brothers famously went bankrupt in 2008 because they did not have enough capital. They had assets of $ 691 billion, and capital of only $ 22 billion … only about 3%. This meant that if Lehman’s assets lost more than 3% of its value, the company would not have enough airbags and go bankrupt. That is exactly what happened.

And what about the current airbags of the leading Central Banks of the world? The US Federal Reserve is 1.53%; European Central Bank: 3.69%; Bank of Japan: 1.92%; Bank of England: 0.843%; Bank of Canada: 0.532. So draw your own conclusions!

“Now, in the period of persisting problems in the global economy, with a large amount of accumulated public debt and unbalanced budgets, countries simply need additional financial resources. The proposed measures are the source of such resources, which can be obtained without resorting to unpopular austerity measures or unpopular measures to increase the tax burden, ”explained Alexander Deryugin, deputy director of the Center for Fiscal Policy.

That is why governments have decided to take on entrepreneurs who do not want to share their accumulated savings with anyone else. But what about entrepreneurs, for example, the United States think closely about the pension funds of its citizens. So to say, why not take advantage of the easily accessible means of defenseless pensioners to support the economy of the country.

The pursuit of money continues, pursuing not only real business but also electronic when companies providing electronic services are unattainable because of their “weightlessness” because e-commerce representatives do not belong to any jurisdiction. The charges have already showered on corporations such as Amazon, and Apple, and Google. At Orlando some time ago, we already told you about Apple, which over the past 3 years, has brought in more than 74 billion offshore profits.

And of course, the party did not bypass the automatic exchange of tax information, which is now mainly carried out on a bilateral basis.

The existing system is not just a way to avoid paying taxes, it is also the creator of thousands of jobs for lawyers, accountants, lawyers, etc. For example, just take a look at Cyprus. This island nation, which flourished for many years thanks to the successful financial products offered by the state. The inhabitants of the island provided high-class service to foreign clients and all lived happily, for the time being. Now the main question is how Cyprus will survive the winter.

All this, nothing more than a big game in which dramatically decided to change the rules. A good example is the case of the American company Starbucks. Like many large companies, Starbucks did not violate the law but merely optimized its taxes by paying a tax on royalties (use of the brand) in Holland, where the rates were lower. But, as soon as this information yielded to publicity, a real scandal occurred, the consequences of which forced Starbucks to voluntarily agree to pay higher taxes.

Also on Orlando, you can read about the loud statement by the director of the OECD tax policy center, Pascal Saint-Amans, that the government will no longer play by the general rules and will no longer think about bans, and is ready to act outside the contractual framework to achieve its goals. OECD and G20 will collect taxes and without contracts!

OECD assumes that all these measures will be implemented in the next couple of years. For Russian companies, this can only mean more expensive, difficult and difficult working conditions in a tax haven.

“Since Russian companies are regulars of offshore companies, for them in the long term, the implementation of these measures would mean the need to pay taxes at generally accepted rates, which could lead to a reduction in their disposable income. However, their ability to negotiate with the Russian authorities on providing themselves with tax breaks can partially or fully solve this problem, ”says Deryugin.

But, in spite of all the indignations and protests, the financial system is undergoing transformations that cannot be stopped. Offshore Pro Group recommends that you think about your safety and the security of your assets today. Of course, this is the right choice of jurisdiction and a foreign bank, but in addition, it is also the correct passport. Yes, yes, it is the correct passport that will give you the opportunity to always have workarounds to protect your savings. We propose to consider you the option of acquiring second economic citizenship. For example, you can turn your attention to the oldest and most respected in the world program of economic citizenship of the Federation of Saint Kitts and Nevis.

This paradise in the Caribbean can be for you and your business not just a classic offshore jurisdiction, but also your second home. For residents and US citizens, this country 10 years ago has become a financial mecca. And for residents of the CIS countries and Russia, Nevis is a place for registering special LLC champion companies in asset protection. In addition, the Federation of Saint Kitts and Nevis is a favorite of economic citizenship. In this article, you will find more how to protect your assets.

The leadership of the country from the moment of obtaining sovereignty offers the opportunity to obtain citizenship on an economic basis in two ways: investment in real estate and investment in the Sugar Industry Diversification Fund (SIDF). You can get a Federation passport by making a one-time non-refundable payment to the Sugar Industry Diversification Fund or choose the option to purchase real estate on tropical islands, the cost of which you can reimburse by reselling the property after 5 years.

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