Join our investing community

Off shore company in Tax Haven.

Discussion in 'General Investing Discussion' started by Boatboy, 24th Jul, 2007.

  1. Boatboy

    Boatboy Well-Known Member

    Joined:
    23rd Jul, 2007
    Posts:
    74
    Location:
    Brisbane
    Does anyone know the "real story" in using offshore companies.

    The question is in relation to this post,

    http://www.invested.com.au/85/what-do-325k-16272/

    and I had looked at it a little bit when I went delivered a boat to Vanuatu a few month's back, but beer drinking and fishing interfeared with my investigation's :)

    It is my understanding that I could set up a company name in Vanuatu, purchase a big wad of income producing fund's through that company, and as Vanuatu has no income tax payable, pay no tax on those investment's ???

    I realize that it may be an oversimplification of it ,but can this be done and is it legal????

    I certainly don't want to end up like Glenn Wheatley.:(


    From the Vanuatu Govt. website

    The Government of Vanuatu is determined to make Vanuatu one of the foremost offshore cyberspace ports in the world. It is the first offshore finance centre in the Pacific region to pass electronic transaction, ebusiness, and interactive gaming legislation. The new laws set up an Internet Free Trade Zone where you can conduct any kind of legitimate business without paying any taxes - no income tax, property tax, capital gains tax, corporate tax, VAT or GST.

    Vanuatu's Internet Free Trade Zone
    vanuatu offshore companies

    Dave
     
  2. Tropo

    Tropo Well-Known Member

    Joined:
    17th Aug, 2005
    Posts:
    3,396
    Location:
    NSW
  3. Denis

    Denis Well-Known Member

    Joined:
    16th Aug, 2005
    Posts:
    67
    There are so many legal ways to reduce/minimise your tax liabilities in Australia?
    I don't think it makes much sense to pay promoters a fat load of money to help you hide what you could probably legally do almost the same in Australia and never have to look over your shoulder.This forum has spent considerable time on implementing tax effective structures.
    The Vizard and Wheatley cases are the ones we hear about. There are plenty of others being investigated by ATO who have been dobbed in by neighbours, associates and ex associates.
    I would want to spare my wife and children from any structures and subsequent prosecution if the idea ever sounded attractive to me.

    Denis
     
  4. Boatboy

    Boatboy Well-Known Member

    Joined:
    23rd Jul, 2007
    Posts:
    74
    Location:
    Brisbane
    Got similar response's from posters on SS, and fair enough with the flack in the paper at the moment.

    Here is a copy of the reply I posted.


    OK,
    after spending the last hour and a half on the phone with the ATO and going through 4 different department's, I am now waiting for a knock on the door. :eek:

    I specifically said I did not want to read about myself in the paper like Glenn Wheatley, and made reference to Project Wickenby http://www.treasurer.gov.au/tsr/cont...s/2006/072.asp
    and not wanting to be their next catch.

    The person I spoke to kept pushing the issue of "residency" as being the most important issue to it all.

    If deemed to be an Australian resident at the time, for the purpose of taxation, ALL money's earned [All money's from IP's, shares, managed fund's etc] would attract tax in Australia.

    If deemed to be a NON-Australian resident at the time, for the purpose of taxation, all money's earned from IP's in Australia eg: rent and CGT on sale, would be taxed by the ATO at the higher non-resident tax rate.

    BUT, fund's earned through a Vanuatu company name, and we were specifacally speaking shares/managed fund's/income producing fund's, if I was a non-resident at the time, and especially if the fund's were being spent overseas, would not be taxable by the ATO.

    However, I was advised to get further advice as it is a tricky area that can't really be explained in full over the phone.

    So, on the surface, it would seem that if we are NON-resident's for the purpose of taxation, all Australian earning's will attract tax, and any earning through the Vanuatu company, will not.

    Some reading

    http://law.ato.gov.au/atolaw/view.ht...20AUSTRALIA;

    http://law.ato.gov.au/atolaw/view.ht...20Australia;

    http://www.ato.gov.au/SearchResults....go.x=16&go.y=6

    http://www.ato.gov.au/SearchResults....o.x=22&go.y=13


    Dave
     
  5. seaview

    seaview Well-Known Member

    Joined:
    8th Jun, 2006
    Posts:
    77
    Location:
    NEWCASTLE
    Good on you Boat Boy for some lateral thinking. I have entertained similar thoughts myself, but have not researched it much as there seem to be plenty of ways of minimizing tax here legally (i.e. prepay capitalized interest, negative gearing etc). The big problem I noticed is that I could not buy Navra as a non Australian - not sure about other managed funds but if the same rule applies that may limit the opportunities a bit. Though I guess there are some good overseas funds.
    I am very happy with Navra for income and other whopping growth Oz funds like CFS geared and McQ Property Income Fund etc. so see no need to go outside Oz. But I have not tried beer and beaches in Vanuatu yet.
    Cheers
    Seaview
     
  6. Boatboy

    Boatboy Well-Known Member

    Joined:
    23rd Jul, 2007
    Posts:
    74
    Location:
    Brisbane
    Thank's seaview,

    while there may be way's of minimizing tax legally in OZ, this is more an exercise at paying ZERO TAX LEGALLY for overseas investment's for NON-residents


    I will still be Australian, just classed as NON-resident for tax purposes.

    The beer , Tusker, in Vanuatu is sensational, beaches are good but sharky.

    Alway's looked forward to "Tusker Time":D :D :D

    Vanuatu Beer Among the Best in the World

    Dave