International taxation

International Taxation: Advantageous European Countries

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When you talk about "tax havens", the mind runs to sunny and exotic islands. Those places where  we imagine zero tax reigns.

To understand this phenomenon we can refer to three reasons that have contributed to their inexorable decline. More than a decade ago, the increasing demands of governments have required - at all levels - new and tougher tools to identify, target and discourage the flight of capital abroad. Germany and Italy were the first nations to act in that direction.
But without a serious international coordination and a strong political will for transparency, the problem remained unsolved. September 2001 has shown  the world how the system of tax havens worked to provide financial support to clandestine paramilitary structures.
Finally further collapse of tax havens derived from the Enron case, in order to reassure movable investors about transparency of financial transactions made by large Corporates, listed companies quoted on the Stock Exchange.
So what are the alternatives - this time legal and safe – that are now emerging?
There are several solutions especially after the European Union has included new countries (Hungary, with a tax of 18%, and very soon Cyprus), but we’ll try to limit the research only to those that provide the highest level of legality, reliability and security. We’ll not talk about Madeira, Monaco, the Channel Islands or the Canaries, but we’ll focus on the more traditional Anglo-Saxon world - Ireland and Great Britain - which offers excellent guarantees of reliability, legality and safety as well as a language universally known. Consider then the legal and technical conditions suggested by these two countries.
International taxation - IRELAND (Corporation Tax: 12.5%)
Inside the Irish company law it is certainly better to refer to the Private Limited Company.
The minimum capital required for its formation is only one Euro and it is allowed the unipersonale form. Shareholders can act through a trustee - nominee shareholder - which manages on their behalf. If necessary, the trustee may also appear as a formal partner, while the real beneficiaries would continue to enjoy their position thanks to the Trust contract.
The administrative body - the Board of Directors - must consist of at least two subjects, one that can also work as the secretary to whom the Irish law requires a series of duties including accounting ones. There is also the Corporate Director, that is the administrator himself is - in turn - a private limited company. There are also a number of facilities that allow a further reduction of taxes, but they are very specific cases.
International taxation - UNITED KINGDOM (Corporation Tax: 21%)
Essentially the British corporate system is just alike the Irish one. In this case we suggest the use of Private Limited Company, almost similar to what has been said before apart from the fact that the English law allows there could be a single director (the Sole Director) who can also be - as in Ireland - a Corporate Director.
However the British corporate tax is significantly higher than the Irish one (21% versus 12.5%) and does not to provide special benefits. Once you create the foreign company PLC - then you can use the provision in the Directive CE453/90 which taxes the 5% of profits returned to Italy. In this case the requirement of "permanent establishment abroad” should remain, a condition required by the European Council Directive of 22nd December 2003.
For further information about Great Britain and Ireland taxation and laws look at this the website www.betterregulation.com.

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