What’s the Difference Between Residency and Citizenship? There is a lot of confusion when it comes to this topic. Many people don’t understand the difference between residency and citizenship. A residency permit gives you the right to live and possibly work in a particular country. Citizenship gives you access to their passport, and also typically gives you the right to vote. It also might change what benefits…
What is “Withholding Tax”? Most people only think of one, in some cases two layers of tax. In fact, we generally, have three layers of tax to consider whenever we’re doing international tax planning and structuring. The first layer is corporate income tax, which is what most people are trying to reduce by going to a low or zero…
What is “Taxation Basis”? Taxation basis in simple words means – which portion of your income is the country going to tax. The two most common you will hear about are worldwide income taxation and territorial taxation. There are few other forms of taxation basis that are not so common, including zero tax and remittance or blends of these. …
What is “Transfer pricing”? Lots of people have the idea of setting up an offshore company in a low or zero tax jurisdiction and then charging the original company (that’s in high tax jurisdiction) with management or marketing fees (or similar fees). Well, there are rules against doing this. These rules are called “transfer pricing rules”. If you are…
What are CFC Rules (Controlled Foreign Company rules)? There are lots of misunderstandings when it comes to CFC rules (controlled foreign companies rules) and CMC rules (management control rules, part of Corporate Residency Rules). Lots of people get confused about which is which. You have to pay attention to both. However, not every country has them, some countries will have CFC but…
What Does Source Income Mean? Today we’re going to learn about “income source”. Have you heard about territorial tax systems? What it means, in theory, is that they only tax you on your locally sourced income. By contrast, some countries will tax you on your worldwide income, meaning you pay tax on everything you make everywhere. (For the difference see taxation basis) Most places will tax…
