HOW TO REDUCE BUSINESS TAXES?
Reducing your tax bill can be done in many ways.
You can move your business to a country that charges a low percentage of tax or one that doesn’t charge any tax at all.
Normally, paying a low tax percent gives you access to a high-quality jurisdiction that’s well-respected globally, which is important when you try to open a business bank account.
HOW TO INVEST BUSINESS PROFITS TO AVOID TAXES?
The best way to invest business profits back into your own business is through tax deferment that becomes available to you when you incorporate your business offshore.
You will get to defer paying any tax that might be due, as long as you keep your profits in your business. You can invest this money back into your company for research, development, marketing or other growth strategies.
HOW TO AVOID PAYING BUSINESS TAXES ALTOGETHER?
Here at ATF Consult International, we don’t recommend that you set out with the goal of avoiding business taxes.
Traditional offshore havens aren’t as appealing anymore and chasing that 0% in business tax might not make sense in the long-run.
There are ways you can structure your company to pay 0% tax, but they come with the trade-off of operating in a jurisdiction that isn’t regarded very highly.
It’s just not worth your while.
THE SPECIAL RULES FOR US CITIZENS
The United States is pretty much the only country in the world that taxes its citizens on their worldwide income, no matter where they actually reside.
It comes as no surprise, then, that there is a special set of rules for US citizens when it comes to doing business offshore.
It’s true that US citizens have fewer opportunities to pay 0% tax. But it’s not impossible.
You can definitely do something about it and dramatically lower your tax burden if you’re a US citizen living overseas as an expat or nomad.
Setting your business up to operate in a zero- or low-tax jurisdiction is always a great idea (think Puerto Rico), but keep in mind that you might not be able to pay 0% tax as a US citizen.
But how does 12% sound? Or 8%, even? Going from 40% in the United States to 8% will certainly feel like an improvement.
That said, you should keep in mind the stringent reporting requirements that demand that all American citizens’ bank accounts worldwide be reported to the IRS.
You may be able to avoid these reporting requirements (FBAR) if you’re married to a foreign spouse or have a foreign business partner, but these exceptions must be used with great caution.
Be careful when trying to reduce tax as an American business owner because the government has truly tightened its grip on offshore incorporation and banking.
Governments want to tax as much of your profit as possible.
The time has come by registering your company in improving your tax efficiency with ATF Consult International Ltd.