Share your opinion: what are the legal ways to optimize corporate income tax when expanding a business outside of Russia? How to take into account the peculiarities of taxation in different countries and minimize tax risks when entering the international market?
The expansion of business abroad is associated with a number of features of tax planning and requires a careful approach. Here are the main legal methods for optimizing corporate income tax in international business:
1. Use of preferential treatment of foreign jurisdictions
Some states offer special regimes that reduce the tax burden for investors:
Registration of holding structures in countries with low corporate tax rates (e.g. Netherlands, Luxembourg).
Creation of subsidiaries in offshore areas (if such a structure corresponds to the goals of international business).
However, it is important to remember that abuse of such schemes can lead to problems with your country's tax office.
2. Application of double taxation agreements
Concluded international agreements avoid the situation when one company pays taxes twice: both in its country and abroad. It is necessary to carefully study the provisions of the contracts in order to correctly distribute the taxable bases.
3. Optimization of profit distribution structure within the group of companies
For example, redistribution of income through royalties, royalties, dividends and interest. It is important to comply with the transfer pricing rules and international BEPS ("Base Erosion and Profit Shifting") practice.
4. Correct handling of export transactions
When exporting goods and services, the right to receive tax deductions for VAT and other indirect taxes often arises. Clear documentation of exports helps to optimize costs and reduce the overall tax burden.
5. Regional tax considerations
Different jurisdictions have their own approaches to determining taxable bases and tax rates. For example, in some regions of China there are reduced rates for high-tech enterprises, and in India there are benefits for new industries.
6. Organization of cost centers outside Russia
Companies can locate support units, service centers and sales offices in countries with low labor costs and tax preferences. This allows you to reduce costs and, accordingly, reduce the taxable base of the parent company.
7. Adjustments to financial statements and accounting for international risk diversification
International Accounting Standards (IFRS) allow you to take into account the economic realities of each individual jurisdiction. Competent use of IFRS helps to reduce the overall tax burden and transparent reflection of financial results.
Optimization of corporate income tax in international business should be carried out exclusively by legal methods and accompanied by consultations of qualified specialists. The independent introduction of complex schemes is fraught with the risks of fines and other sanctions from government agencies.