What are the tax implications of AEOI CRS when you are a beneficiary?

[tradingworldwide321]

Hello everyone.

I hope you are doing very well.

As I Have been learning a‌ lot there's a question that comes to my mind.

Let's imagine you are the UBO‍ of foundations and trust entities and hire staff to manage it for you like manager,⁠ director and secretary. However you have corporate permanent establishment in the country where the foundation⁤ and trust are registered. Example: Your Panama Foundation has Corporate Permanent Establishment there. Your Seychelles⁣ Foundation has Corporate Permanent Establishment there etc.

We know Panama and Seychelles participates in AEOI⁢ CRS, we also know you are the UBO for banks and you are tax resident︀ in a corrupted country where participates in AEOI CRS as well.
This country where you︁ live has worldwide taxation.

You, as the UBO, don't withdraw any funds from any of︂ these entities but you get a salary and any of these entities are not tax︃ residents in the UBO's tax residency.

So this is the thing,
What are the tax︄ obligations that may arise to you as the UBO?

My understanding is this: if the︅ entities doesn't have PE and if you don't withdraw funds then, you should not be︆ able to pay taxes for any gains that this entities may have. However, the tax︇ authority where you, the UBO, are tax resident will know that you are a beneficiary︈ of these entities but don't pay nothing.

I would like to know about your opinions︉ about this situation.

Thank you

 

[Martin Everson]

Depends on your country of residence as UBO. Also Trusts have beneficiaries.‍ You need to clarify what the relationship of the UBO is to the trust or⁠ even foundation.

Not true

Yes

Don't waste your time depending on your country of residence. For example in some countries foreign︁ trust income held within the trust and not distributed is theoretically apportioned to each beneficiary.︂ Hence you are taxed at beneficiary level whether the trust distributes its internal profits or︃ not to the beneficiaries.

For certain countries offshore trusts make sense i.e setting one up︄ before moving to South Africa where offshore trusts are recognized and not taxed etc.

Basically you need to explain your specific situation, your relationship to trust or foundation. UBO is︅ too generic a term i.e are you a trust beneficiary, trust protector, settlor etc etc.︆