Many high profile political activists are in jails around the world because they were not afraid to speak up and be heard. Dictators on the other hand steal from their countries channelling funds into offshore tax havens and living lives only multi-millionaires could dream of. While the people in their country are starving these dictators manage to live in the lap of luxury.

Robert Mugabe of Zimbabwe is especially infamous for taking the land away from white farmers in his country and distributing it among his people. He did this in order to gain popular favor among the citizens of his country. Since then he has led his country to financial ruin and ruthlessly stopped opposition movements. He has taken his country into a billion percent inflation and he uses currency manipulation to funnel money for himself into offshore accounts.

Muammar Gaddafi used to rule Libya. He was in power for many decades before being deposed and killed. He was known for his eccentricity and for giving flamboyant speeches. His politics were erratic and he ran a police state. He based his rule on his own version of the communist Mao’s Red Book. His version was called the Green Book and includes a solution to what he considered the problem of democracy.

He was repressive to his people and pretended to be Africa’s king of kings when he was in other countries. The African Union had to ask him to step down from his position as the Union’s rotating head. He lived in luxury and had money deposited into tax haven accounts.

The world watched with bated breath as the deposition of Hosni Mubarak unfolded in Egypt. There was a general uprising that could not be halted and he was eventually removed from power after many years of leading his country in a paranoid and autocratic fashion. He had an emergency law that was 30 years old in place, so he could effectively squash any opposition movement and activity. In 2005 only 23 percent of Egyptians bothered to vote in the general election since everyone knew that he had already groomed his son, Gamal to succeed him. Towards the end of his regime he was viewed as being senile and only interested in staying in power.

Another example is Fidel Castro of Cuba, probably the most infamous dictator the world has known in recent years. He has held Cuba in the grip of communism for many decades. He retired from active leadership in 2008 and his brother Raúl Castro has since taken over as leader of the country. Castro was strongly supported by Russia when that country was still in the grip of socialism. Many countries around the world have put trade embargoes on Cuba to protest the socialist regime of Fidel Castro. As a result his people are forced to drive cars from the 1950s and recycle old parts because they cannot buy anything modern.

 This article has been kindly contributed by Louis Rix, financial expert for both Netcars.com and Carfinance247.co.uk

Different areas in countries around the world have different taxing policies and a smart entrepreneur will research and decide on the location with the most favorable tax conditions. Now let us not confuse this with looking for ways of tax evasion. It is no doubt important to pay taxes but as a business person the main aim is profits and tax reductions can leave a reduced amount of retained profits on your account sheets. One solution to these tax problems is in the formation of a Tax Haven Company. This will allow the entrepreneurs to register their business in another country where small or no taxes are applicable. However when deciding which Tax Haven Company Formation to go for authenticity and repute of the company must be thoroughly researched in order to take advantage of the best services available.

As a member of the EU, Cyprus has rigid laws for its offshore business companies. The Cyprus Tax Haven is the most attractive tax planning destination for entrepreneurs today. This island is not just an attraction for tourists but it also offers excellent offshore services including offshore Tax Haven Companies.  If all owners of a business incorporated with the Cyprus Tax Haven are foreigners then the business can be called an International Business Company. However the low tax rates are applicable for civilian business owners as well. All incorporated business will enjoy a 10% tax rate on annual profits which is indeed not only a haven but heaven for entrepreneurs. And as if that wasn’t enough Cyprus also does not apply withholding tax on dividends and it also does not have any wealth tax regime.

Cyprus Tax Haven is also ideal for investments. Offshore bank accounts services are available in many banks on the island which do not get taxed on interest earned. A Cyprus international trust can also be formed in the Cyprus Tax Haven which does not pay taxes on incomes earned outside of its jurisdiction. Trust dividends and interests are also tax free so maximum income can be earned through these International Trusts.

Privacy is respected by the Cyprus Tax Haven for the offshore bank account holder, owner of the trust and of the International Business Companies. All these favorable conditions for business owners encourage investment from abroad into Cyprus and helps entrepreneurs achieve their aims of high profits and of saving money for reinvestment. What more could a business owner ask for. No matter what your business trade is the Cyprus Tax Haven in the EU is an ideal arrangement for your business that leaves abundant retained profits for reinvestment and expansion of the business.

#1. Bаѕіс Pеrѕоnаl Amоunt

Thе bаѕіс реrѕоnаl аmоunt hаѕ іnсrеаѕеd tо $10,320. Thіѕ mеаnѕ thаt thе fіrѕt $10,320 оf іnсоmе іѕ еxеmрt frоm tаx.

#2. Sроuѕе оr Cоmmоn-Lаw Pаrtnеr Amоunt

Thе ѕроuѕе оr соmmоn lаw раrtnеr аmоunt hаѕ іnсrеаѕеd tо $10,320. Thіѕ tаx сrеdіt іѕ аvаіlаblе tо thе hіghеr іnсоmе ѕроuѕе / соmmоn lаw раrtnеr. Hоwеvеr, іt іѕ rеduсеd bу thе nеt іnсоmе оf уоur ѕроuѕе / соmmоn lаw раrtnеr. Fоr еxаmрlе, іf уоur ѕроuѕе hаѕ а nеt іnсоmе оf $3,000, thеn thе ѕроuѕе аmоunt аvаіlаblе tо уоu tо сlаіm аѕ а сrеdіt іѕ $7,320.

#3. Hоmе Rеnоvаtіоn Tаx Crеdіt

Yоu саn сlаіm а tаx сrеdіt fоr rеnоvаtіоnѕ mаdе tо уоur hоmе. Thе tаx сrеdіt аррlіеѕ tо rеnоvаtіоnѕ mаdе аftеr Jаnuаrу 27, 2009 thаt аrе іn еxсеѕѕ оf $1,000 tо а mаxіmum оf $10,000. Yоu ѕhоuld соnѕult уоur Chаrtеrеd Aссоuntаnt іn Tоrоntо tо ѕее whеthеr уоu аrе еlіgіblе fоr thіѕ tаx сrеdіt.

#4. Hоmе Buуеrѕ Plаn

Thе mаxіmum аmоunt thаt уоu саn tаkе оut оf уоur RSP’ѕ tаx frее tо рurсhаѕе а hоmе hаѕ bееn іnсrеаѕеd tо $25,000 fоr thе 2009 уеаr. Thіѕ tаx іnсеntіvе іѕ knоw аѕ thе hоmе buуеr’ѕ рlаn. Hоwеvеr, уоu muѕt rерау thе еntіrе аmоunt thаt уоu іnіtіаllу wіthdrеw tо уоur RSP оvеr а реrіоd оf tіmе. Thе аnnuаl rерауmеnt іѕ еquаl tо 1/15th оf thе аmоunt іnіtіаllу wіthdrаwn. Yоu dо nоt hаvе tо mаkе а rерауmеnt іn thе уеаr оf wіthdrаwаl nоr thе fоllоwіng уеаr.

#5. Fіrѕt Tіmе Hоmе Buуеr’ѕ Tаx Crеdіt

Thе fіrѕt tіmе hоmе buуеr’ѕ tаx сrеdіt оf $5,000 іѕ аvаіlаblе tо fіrѕt tіmе hоmе buуеrѕ thаt іntеnd tо lіvе іn thе hоmе thаt thеу рurсhаѕе. Thе сrеdіt іѕ оnlу аvаіlаblе fоr hоmеѕ рurсhаѕеd аftеr Jаnuаrу 27, 2009.

Allаn Mаdаn іѕ thе оwnеr оf Mаdаn Chаrtеrеd Aссоuntаnt. Hе іѕ а Tаx Exреrt & Chаrtеrеd Aссоuntаnt іn Tоrоntо & Mіѕѕіѕѕаugа.

Aѕ а Chаrtеrеd Aссоuntаnt іn Tоrоntо, Allаn рrоvіdеѕ аdvісе tо еmрlоуееѕ аnd соrроrаtіоnѕ.

They used to say that only two things in life were certain. Death, and taxes.

Nowadays though, the latter is not necessarily true. The marketplace is now international and there are plenty of nations who are only too willing to offer a tax-free haven to anybody who is fed up with paying their government.

These so called “tax havens” are not going anywhere, and many of them have a very robust model in place. The theory is that you will operate your business from whichever country offers you the best tax cuts, you’ll invest in real estate there and contribute to their economy by purchasing products there too. It’s a win-win and it seems to be working.

The following 5 tax havens are very popular amongst expatriates and corporations for their low or non-existant taxes on personal income, capital gains, inheritance or gifts.

1. The Cayman Islands. The Cayman Islands has been the de facto choice for foreign profits, capital gains and income to foreign investors for some time. Corporate tax is 0% and foreign assets total $1.4 trillion. Add to that the fact that if you move to the Caymans you are virtually required to snorkel and scuba dive and it’s very appealing. Their lax tax regulation was also written by corporate tax lawyers and is fairly water tight, so it’s unlikely to lose its place as a major tax haven.
2. The British Virgin Islands. How does this sound as a tax haven? No capital gains tax, no gift tax, no sales tax or value added tax, no profit tax, no corporation tax and no inheritance tax or estate duty! They do actually have income tax in the British Virgin Islands though. The rate of taxation? 0%. Combined with white sandy beaches and sailing the gorgeous blue ocean, it’s hard to fault this popular tax haven.
3. Switzerland. Swiss banking has been the pre-eminent leader in private banking for many years and is often considered the first tax haven. Corporate tax is 15-16% and there are more than 30,000 registered companies in Zug, Switzerland. The official city population? 26,327. Transocean, the owners of the BP oil spill platform, registered in Zug two years ago and have saved $2 billion in taxes during that time. They have over 18,000 employees globably and only 12 of them are based in Switzerland.
4. Bermuda. Bermuda is another country that has become synonymous with the term tax haven and has been used successfully by many because it has no income tax, capital gains tax, VAT, sales or use tax or wealth tax. The country, amongst other tax havens, receives regular criticism for encouraging tax avoidance, but is still a very popular location for incorporation.
5. Ireland. In Ireland, the corporate tax is 12.5% and it is very popular amongst high-end tech companies. In Dublin, over 600 American companies have set up their European headquarters which created over 100,000 jobs for the city. Tech giant Google funnels non-US profits from Ireland to tax-free Bermuda and has been paying just 2.4% in taxes since 2007 – a saving of $3.1 billion.

Tax havens like these provide a legal way to increase profits and if used correctly they will significantly lower your tax liabilities. If you’re interested in finding out more, seek advice from an experienced off-shore company formation provider to discuss your options.

Step 1 – Research options

The first and most simple step is to research your options. Identify what your business or individual needs are and find a country that can deliver these. The internet is a great place to start to source the benefits that different offshore companies can offer.

Step 2 – Calculate your budget

There may be a particular offshore company that can offer you infinite benefits, however at a high price. Therefore be realistic about your objectives and offset this against how much you can actually afford to invest into this project.

Step 3 – Seek professional offshore tax advice

Before registering with anyone, it is important to determine if your business is in fit shape for the offshore account to be set up. This involves employing the services of a specialist tax lawyer to ensure that your accounts are in the right shape to meet all offshore regulations and tax treaty obligations.

Step 4 – Select your offshore company

Once your finances are in shape to make the transaction, identify the best service provider that meets your needs. Take into consideration the services that they offer for example do they have English speaking customer services? Do they offer an online banking system? Considering the practicalities is essential to ensuring that future activity can be carried out as smoothly as possible.

Step 5 – Purchase or register your offshore company

Make your application through whatever application process your chosen company offers and authorise payment. The process of fulfilling any legal processes in this transaction is best done by hiring a management service provider who is located in the country that you have chosen. This means that the account can be run in the most cost effective way as the management service provider can perform a wide range of services like sales processing, banking, accounting and financial reporting etc.

Following these five simple steps navigates you and your business towards setting up and running an offshore company.

Laura Susstance is an experienced financial writer from The United Kindgom, When not writing content on a freelance basis she writes content for her payday loans review website.

Myth: e-Filing Has No Benefits

One of the most common tax myths is that e-filing your tax return online has no benefits or advantages over traditional paper filing. The truth is that there are two key benefits to e-filing your income tax return. The first advantage of e-filing is that the process is much faster than mailing your tax forms to the IRS. Also, the online tax services available make it easier to understand and correctly file taxes. Some tax sites will even provide live support if you have any questions while filing.

Myth: Filing Taxes is Optional

There are many income tax protestors who would like you to believe filing a tax return is optional. This, however, is not the case. According the IRS and the federal government you are required to report your income and fulfill your tax obligations. Those who choose not to file their taxes wind up getting caught and hit with expensive penalties or even jail time.

Myth: Gambling Losses Are an Easy Deduction

After a big loss at the casino this myth starts to sound rather believable. The reality of this tax myth is that only a specific portion of gambling loss can be claimed as a deduction. The IRS allows taxpayers to write-off their total net gambling losses for the tax year. For example, if you lost $2000 but won $500, you can claim a $1500 gambling loss deduction.

Myth: I Work From Home, So I Get a Home Office Deduction

The IRS is extremely specific and strict with the definition of a home office and what qualifies for a home office tax deduction. Many taxpayers think that they qualify for home office deductions simply because they work from home twice a week. In reality, the home office must be the primary business location in order to qualify.

Myth: I Don’t Need to Claim Tips

Cash tips you receive are a part of your income and need to be reported to the IRS. Too many tipped employees are under the impression that only their hourly wages are taxable. Similar to the income of an independent contractor, these unreported wages must be added to your income tax returns.

You can help yourself avoid a stressful audit or expensive penalties from the IRS by understanding the truth behind common tax myths.

Teresa writes articles to help her readers who are in need of back tax help.  She has over a decade of experience in dealing with the IRS and providing tax resolution services.

Cyprus has a reputable, known and established nautical infrastructure and provides considerable tax incentives for the Cyprus shipping companies. Cyprus is also a member of the IMO (International Maritime Organization) the Council of Europe and several others. It has accomplished two-sided agreements of collaboration in commercial shipping and international double tax treaties (DTTs) with a large number of nations. Cyprus attainment to the European Union in 2004 has boosted the registration of vessels under Cyprus flag.

Legal Framework and Nautical Management

Cyprus shipping companies are regulated by Chapter 113 of the Laws of Cyprus. Shipping legislation in Cyprus is primarily based on the UK model. The registration of Cyprus ships is controlled by the Merchant Shipping Legal Framework and Laws of 1963 to 1996. The other most important shipping laws are the Merchant Shipping Legal Framework Laws of 1963 to 2002 and the Merchant Shipping Legal Framework and Laws of 1992 to 2003.

All naval matters are below the authority of the Ministry of Communications and Works. The Ministry exercises its right through the Department of Merchant Shipping which deals with the listing of ships, management and enforcement of shipping laws, enforcement of international conventions, and investigation of nautical fatalities, resolving disputes on board of Cyprus flag ships and training and certification of seafarers.

Cyprus Shipping Companies Formation

In order to register a ship under the Cyprus flag, a Cyprus Shipping Company must be incorporated. Then the Cyprus shipping company will acquire the vessel in its name. It will be incorporated as a private company with limited liability (LLC) under the requirements of the Cyprus Companies Law, Chapter 113 of the Statute Laws of Cyprus, as amended.

The most important point of Double Taxation Treaties (DTT) is to keep away from the international double taxation when the same profits of a legal entity are taxed in 2 or more countries. As a result of the DTT worldwide businesses are traded with constancy and assurance. This is the main motivation why the double tax treaties comprise a vital instrument for tax planning and provide significant advantage to the countries which sign such DTT.

One of the most important reasons why Cyprus has turn into a well-liked destination for incorporating a base for international business is the accessibility to a great number of tax treaties. Cyprus has accomplished 45 double taxation treaties and is also in discussions with numerous other countries for signing tax treaties with them.

Countries with which Cyprus has DTTs:

Cyprus’ DTTs have been drafted so as to deal very closely to the Organization in Economic Cooperation and Development model tax treaty. The purpose of double tax treaties is to avoid double taxation of profits earned in these countries. This is achieved generally by either exempting the profits from taxation by providing a tax credit for the total of tax paid in other contracting nation or by a reduced withholding tax.

Take benefit from the favorable DTT Network of Cyprus and the European Union directives. Oxford’s Cyprus tax team will help you to choose and implement the most appropriate structure for your company. For more details in respect of Cyprus DTT withholding tax rates, please download our Fact Sheet No.2. from www.oxfordcy.com

International Business Companies (IBC) are taxed at the rate of 10% on their taxable income. All expenses incurred in earning the income are tax deductible. Capital gains are tax free in Cyprus (except on immovable property located in Cyprus). The provision of services and the sales of goods by the I.B.C. are outside the scope of Cyprus Value Added Tax.

There is no withholding tax on the payment of dividends, interest, royalties and management fees an I.B.C. company to non-residents.

The treaty with Russia

Under the treaty (1st January 2000) are no withholding taxes on the payment of:

- Interest

- Management fees

- Royalties

- Leasing of equipment

In relation to dividends the treaty provides for 5% withholding tax if the investment is greater than US$100.000, otherwise 10% is applicable.

Income from movable property, including capital gains, is not subject to tax in Russia. Income from immovable property, including capital gains, is taxed in Russia.

The treaty applies to persons (individuals or corporations) who are taxed in Cyprus by reason of domicile, incorporation or place of management. IBC qualify under the treaty because they are taxed in Cyprus by reason of their incorporation.

A tax exemption certi­ficate is required to be obtained from the Russian tax authorities, which is given on the basis of tax certi­ficate obtained from the Cyprus tax authorities.

Structuring the investment activity – An example

The investor sets up a Cyprus company, either by himself or together with other interested parties. The Cyprus subsidiary becomes the partner in a Russian joint stock company.

The Russian Joint Stock company becomes the operating company in Russia which generates all income. The Russian Joint Stock company pays Russian taxes on its pro­fits and distributes the dividend to its shareholders at reduced withholding taxes. Russian taxation may be reduced by charging management fees, interest, royalties etc.

The Cyprus IBC will not pay Cyprus income tax on the dividend received because it will claim a tax credit for the 5% tax paid in Russia. It can then distribute the pro­fits after tax to its shareholder without any withholding tax.

The investor can sometimes treat the dividend as exempt surplus and not pay any tax in his country (e.g. Canadian investor).

Many different structures can be set up. These are to be designed taking into consideration the merits of each case.

It is imperative for any company wanting to be established in Cyprus to ask the right questions and take the proper decisions regarding the kind of the legal entity and everything following after this.

Type of Legal Entity

The most important question which needs to be asked is which tool is the most appropriate for a client. Is it a company? After deciding the right tool, the next question on the table is the structure. A corporate structure can take three forms, public limited company, private company and limited liability company.

Company Name

It is important to choose the name of the company carefully as it will play a consistent role in its incorporation. This is so, as after choosing the name, the company must be submitted to the Registrar of Companies (by your lawyer). While at the Registrar of Companies, the name will be checked and if it is too similar to another, misleading, deceptive or offensive the company will not be given a permit and as a result will not be incorporated.

The Share Capital

Each company is authorized to issue a specific amount of shares to its shareholders, also known as share capital. These are then divided into individual shares of fixed sums, commonly upon creation the share capital will be 1000 shares of € 1 each. These numbers can increase when issuing new shares at any given time.

The Shareholders

Shareholders are the ones to whom the shares are allocated. There must be at least one registered shareholder, which can be either a person or a legal entity (i.e. company).

Directors

The appointed director or directors of a company can either be Cypriot or a foreigner. However the nationality of the director will play a role in determining if the company can benefit from the Cypriot taxation laws (if it is managed and controlled in Cyprus).

The main responsibility and role of the directors is the approval of the constitutional documents of the company, such as the Memorandum of Association. Furthermore they have the obligation to ensure the implementation of the company’s fundamental documents and Cypriot Law in its day to day functioning.

Company Secretary

The post of company secretary is fulfilled by a person voted by the Board of Directors. This person is the administrator of the company instructed by the Board of Directors and, without the Board’s or Shareholders’ approval, has no binding authority.

Registered Office

This is the official address of the company and to which all correspondence will be sent. For Cypriot companies it is imperative that the registered address be in Cyprus.

Objects

The Memorandum is considered to be the most important company document. Although it is drafted in general terms, it is the document clarifying the fields in which the company is allowed to take action and undertake the activities, again, described in the Memorandum.

Articles of Association

The Articles of Association are the main document describing the functioning of a company. They outline the procedures for any company activity. Each document drafted is according to the client’s needs and wants for their company. It is not uncommon for these articles to change in time as long as this change follows the appropriate procedure.

Creation of the Company

For the ease of clients, there are some companies already created and incorporated (off-the shelf companies) which can be changed to fit, accordingly, the client’s needs. Or they can be created from scratch based on the client’s description of the company they have in mind.

Our Firm can provide this for you, as well as any other assistance needed for the incorporation of the company. The firm provides the client with services regarding all the above mentioned steps towards becoming the owner of a Cypriot company.