Due to the increased efforts of companies to relocate parts of their operations or entire businesses abroad and the increasing willingness of people to move their place of residence or life to Malta, the demand for tax expertise for such measures has risen sharply. Sometimes this is also due to standardised controls by the tax authorities to prevent abuse of such international arrangements. Of course, money and income are at stake, as each emigration or departure means less tax revenue for the emigrating country. As a result, new laws and interpretations have been and continue to be enacted, amended and adapted regularly over time. This is not done by national governments alone, but is driven by economic alliances in a relatively coordinated manner. Special mention should be made here of the G20, the OECD and the EU, which have been more active than ever in the last 5-10 years and are in any case keen to crack down on almost aggressive tax evasion and tax avoidance schemes. As companies resort to various tricks and scams, one should be aware that tax authorities also exhaust all their possibilities. As a result, many measures that may have worked a decade ago are no longer relevant today.
Tax authorities, legislators and the judiciary are now gaining a better understanding of the facts and are increasingly questioning the usefulness of structuring through tax-optimised foreign countries. It is precisely this type of tax optimisation that should not be in the foreground. Even in modern international tax law it is possible, and in some circumstances even desirable, to structure tax law in very different ways. Thus, if not structured properly, it can happen that part of the profits, as desired and legally recognised, can be taxed in Malta, for example, but at the same time partly in the emigration country such as Germany.
This is where the principle of value creation comes into play. Similarly, topics such as exit taxation for private individuals, but also for companies, transfer pricing, treaty cancellation, application of double taxation agreements, permanent establishment problems, international share swaps or mergers fall under the heading of international taxation/international tax advice. The establishment of a company or a corporate structure is usually the consequence, but should never be the reason or the origin.
Our principle is transparancy on all sides
Euro Tax Consulting Ltd provides each client with appropriate sound advice in an international context prior to a possible incorporation or restructuring. Often the expertise and advice of Euro Tax Consulting Ltd alone is not sufficient, but expert advisors from the home country can or must be called in. In today’s international tax law, it is not what answer you get, but what questions you ask that matter.
A fundamental part of ETC’s expertise in international tax law is the many years of experience that the relevant staff and advisors can demonstrate. The coordinated efforts of the aforementioned states, municipalities and the measures already implemented have not only been tangible and pervasive from the beginning, but even before these efforts existed, the consultancy was used in the form in which it is used today. We continue to try to anticipate the above developments. Questions of materiality, added value, transparency and real economic reasons and interests played an important role for us long before the Panama Papers