How does a "double-tax treaty" actual work for corporation in EU?

[electric]

Hello,


In response to a proposed offshore plan, I received this reply:

You will need a EU entity to avoid corporate tax and to stay legal with the international tax laws in the EU. A Cyprus company is what you need and you must make use of the double tax treaty that Cyprus has with your country.
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(For clarification, my country is one of the largest EU countries.)


I have tried to comprehend how double-taxation laws work, but I am even more confused now.


Is there an idiots explanation or "explain like I'm five" overview of how this works?


Thanks!

 

[cyprusbanker]

You may look at these links which have been of great help to me at‌ least:

/company-formation/cyprus-company/avoidance-of-double-taxation.html

AND

http://ec.europa.eu/taxation_customs/taxation/individuals/treaties_en.htm

If you are resident in the UK then:

https://www.gov.uk/government/publi...n-treaties-territory-residents-with-uk-income

It's not‍ very complicated when you have learned how this works. Actually you simply pay tax in⁠ the country where it is lowest by proving that your company is managed and operated⁤ in a low tax country like Cyprus, Malta, UK or other places which is done⁣ by inserting nominees (director and shareholder).

Hope it helps, else post here and I will⁢ try to find more information for you 🙂

 

[tax-haven]

It's easy.. if your country has a double tax agreement with say Seychelles (They wont)‌ and you pay 5% corporate tax in the Seychelles (your company does / IBC) then‍ you don't have to pay corporate tax in your home country on that profit. This⁠ requires that the management is located in the Seychelels and it can be proved they⁤ have control of the company! - Seychelles was a bad example.. but this apply for⁣ any other country aswell.