 |
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||||||||||||||
|
|
||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
||||||||||||||||||||||||||||||||||||||||||||||||||||
|
The old adage of many an empire that you need to divide to rule has its corollary in tax planning! As with the most successful empires, the most successful companies must divide and rule! The importance of this strategy becomes particularly apparent when high tax and/or bureaucratic countries are involved. For example, if one were to invest in Spanish villas with a view to renting them out to Northern Europeans, it would be strategically inappropriate to conduct the marketing of the rental villas using a Spanish sociedad limitada (SL) although such a decision may make sense for the initial acquisition and perhaps VAT reclamation relating to the said properties. Why? Well put simply, if the client base is in northern Europe and the properties in Spain, there is no reason to conduct marketing through the Spanish SL. In fact, there is no reason why a tax efficient company could not be used to carry out the marketing provided, as is always emphasized by SCF, there is proper and genuine management and control carried out in the tax efficient jurisdiction and that such activity can be deemed to have a good neutral business reason/logic. Of course, this is just one example of how marketing offices can be used to mitigate tax but there are many more potential ‘creative’ examples. Diagram: An Irish company wishes to purchase a number of investment properties in Spain with a view to generate rental income from them – The advice that may be given is that an offshore company should be set up to give a non-interest bearing loan to the Spanish SL (This means that Spanish withholding taxes will not apply but repayments can be deducted from potential profitability) created to develop the properties and of course reclaim back VAT in the normal way. However, when it comes to marketing a separate but properly managed company in a low tax/no tax zone should be used to market and promote the villas to the future cliental in northern Europe and hence reducing the potential tax exposure of the Spanish SL.
|
|
|
||||||||||||||||||||||||||||||||||||||||||||||||||
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
||||||||||||||||||||||||||||||||||||||||||||||||||||
 |
 |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||
