C6 - Taxation Of Offshore Entities Flashcards
Trusts
Not separate legal entity
Taxed in jurisdictions where majority of trustees reside
NB beneficiaries and settlor also exposed to tax under differing circumstances
Tax of companies
U.K. Residence companies - corporate tax on all chargeable profits on worldwide basis
Non-UK resident - corporate tax if they trade in U.K. Through permanent establishment. May also be liable for income tax on non-trading income
Taxation of partnerships
Partners of GP required to pay income on their share of profit
Taxation on foundations
Residence of foundations will be deemed as if they were a company
Tax avoidance
Legal
Not morally right
Tactical planning
Legal means to delay and minimise tax
Tax evasion
Illegal
Lie on tax form
Not declare income
Organisation of economic co-operation and development
Harmful tax competition
1998 report
Identified tax havens
In deciding if it was a tax haven, lack of derive exchange of info was key intention
40 jurisdictions
Organisation of economic co-operation and development
Exchange of info
OECS views are transparent and effective info exchange as essential in enabling countries to apply and enforce tax laws
Organisation of economic co-operation and development
Model tax convention
Obligation to exchange info relevant to correct application of tax convention and purpose of admin and enforcement of domestic tax laws
Organisation of economic co-operation and development
Model agreement on exchange of info on tax matters
Constituted of representations from OECD members countries and delegates from other offshore centres
Agreement represents standard of effective exchange of info for purpose of OECD on harmful tax practices