G-20 will discuss methods of controlling with offshore companies

19.07.2013

On 19-20 July 2013 in Moscow there will be a meeting of finance ministers and bank governors of the G-20 countries. According to the report of finance ministers at the meeting will be discussed the offshore companies issue. As the Ministry of Finance of the Russian Federation informs, at this meeting will be discussed issues of different nature which are interesting for different countries in various extent. However the offshore problem is interesting for all countries without exceptions, that is why the main topic of this meeting will concern methods of controlling against offshore companies, and in particular it will related to combating against tax evasion.

Concerning the Russian Federation, the Head of the Finance Ministry Anton Siluanov said that Russia is ready to enter into multilateral double taxation agreements. Thus, a model double taxation agreement is changing, and now it can be not only bilateral but also multilateral.

Based on: http://www1.minfin.ru/ru/press/interview/

Expert’s opinion

A serious-minded observer can easily find a huge number of internal contradictions in the authorities’ statements of the countries that are struggling with offshore.

Now the same situation: on the one hand they will fight against tax evasion, on the other hand - ready to move to the double taxation agreements.

Two different categories are compared: tax evasion is a criminal offense, the use of double taxation agreements - tax optimization within the law.

The most paradoxical moment is that the practice of both categories leads to tax decrease!

So will we pay taxes or not? Without world harmonization of taxes (including their administration) – the taxes payment issue can’t be solved.

But this is impossible without real globalization. Some countries from G-20 are poison mind against it.

In general, the discussion around offshore topic looks like the fact that the powerful countries are trying to divide attractive budgets of offshore. To fight with the invented idea is very profitable. It can continue until they have funding. Very profitable! It is remind the global fight against ozone holes, when there was a switch to more expensive refrigerants and high energy costs, but it turned out that the industrial freon have no noticeable effect on the size of the ozone hole. Natural emissions are higher than the amount of Freon which was released into the atmosphere over the lifetime of the refrigeration equipment.

But this quite successfully shook the money tree. The whole world has gone to energy-intensive cooling technology and a return to the old technology means a new restructuring of the global industrial conversion.

Inquisitive readers can find a lot of analogies and examples in the history.

For my own part, I note there comes the time to use the civilized international tax planning tools.

To survive in such situation mean to use the new transparent schemes of work, which will absolutely legally protect your money from unnecessary spending.

Yaroslav Lomakin ( Managing partner of “Honest&Bright” company)