If you are planning to invest something offshore, there are several things
that you need to keep in mind in order to come up with an accurate and
safe tax decision. Some of these things that you should not miss are the
following:
Know more about CGT.
You should be completely aware just how your capital gains will be treated
in the country where you are making your qualifying investment. You need
to ask whether that country where you invested your property has CGT
property tax. Ask what exact rate is being levied at and whether there is
an exempt amount. You must also see to it that you are informed about the
tapering rate of that tax. However, there are also countries which offer
an exemption for those who owned a certain property for about five years
or more.
Be informed about local taxes.
As long as you are investing in one or more properties, make sure that you
keep in mind the local taxes. Whether it is a council tax or an annual
tax, you should know. It could be possible that the purchase tax in the
country where you are investing is a bit higher compared to the country
where you come from. Never forget to ask the percentage rate of stamp duty
because it could be higher or lower than your expectations. Furthermore,
some countries such as Italy, do ask for a 10 per cent tax on purchase per
contract value of each property.
Ask about the existence of a withholding tax.
There are many countries that have been operating on a withholding tax.
Most of the time, this withholding tax is being triggered once a certain
property is being sold. Once you put your property on sale, your purchaser
is obliged to have 5-10% withholding tax depending on the purchase price.
This amount will then be forwarded to the tax authorities where your
property is located.
Watch out on offshore tax company solutions.
Never fall prey to companies who claim to offer tax savings benefits once
a certain property is being purchased through a particular offshore
company. Some of these companies are not telling you the truth. They
will just trick you to believing that they will indeed provide these
benefits but, in reality they do not. Many people have already become
victims of these false claims about gaining benefits from an offshore
company so make sure that you do not end up being on the same list.
Do not depend too much on a tax agent.
Tax agents may prove to be very helpful at times. But, others are just
too good at offering tax advice that you would forget that they are only
tax agents and not tax advisors. Always remember that the main goal of a
property developer or a tax agent is to have your properties or assets
sold. If they claim to provide services that are more than that, then
beware.
Be updated with the latest about the rules on offshore investment.
As an investor, you should be aware of the new rules that have been
implemented in your own country and to the country where you will be
investing as well. Since plenty of people have been involved in tax
evasion cases especially in offshore investment, its law are frequently
being changed and updated. Failure to make yourself updated with these
changes may put you at risk of transgressing these laws which can also
lead you to so much trouble.
Mrs. Munson helps run the website, Howmuchisit.org. Here, you can find
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