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International tax planning involves strategies to reduce or outright eliminate the payment of income taxes and other taxes. Global tax planning doesn't mean illegal tax evasion. There is a big difference between tax evasion and legal tax avoidance. Evasion means lying, hiding, fraud, perjury, and other illegal ways to hide income which is a crime in most countries. Legal tax avoidance is using a global tax plan to legally avoid paying taxes. International tax planning usually includes the use of offshore corporations to be created in countries who do not tax their corporations doing business outside of the country. All of the earned income and passive income (like bank account interest) are tax free. Products or services being sold by these corporations to other countries makes them "offshore" corporation in regards to generating income. Offshore corporations also get their name because they exist away from the client's home country. Here are few advantages of effective international, or overseas, tax planning: • Taking advantage of double taxation treaties between your resident country and other offshore countries • Legally minimizing international tax liabilities • Improved financial efficiency • Maximize working capital • Protecting business, and personal, assets An effective, well-structured global tax planning strategy can legally benefit an international business in a number of areas. It can be a complex process, especially when multiple jurisdictions are involved. There are a number of fundamental issues to consider before deciding on an optimum strategy and this is the reason why using an experienced professional can be valuable. They will assist with both developing the most suitable strategy and avoiding potential issues from arising. Hence, it is important that you understand the tax related laws and rules of your home country as well as of the new country, where you are planning to settle. In addition, you will need to focus more towards global tax planning. Finding a competent tax accountant to come up with an international tax plan takes a little research. The internet is filled with law firms and legal entities creation companies all claiming they can do "asset protection" or can eliminate income taxes or do asset management and other forms of a global tax plan. International tax accountant can also help in your global taxation planning. In fact, they have too a good understanding about offshore tax related rules and breaks. However, appointing an international accountant will be of no use if your prime concern is about offshore banking advantage and investment. They can actually advise you on the residency related rules and laws. About Author:- Josep Guardiola is a chartered accountant who practices as an independent tax consultant. He also author of international tax, in this article he provides nonresident tips. For more information you can visit Taxca.com.
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