Why cant “offshore shell corporation” tax avoidance methods used by the wealthy be used by the working class? Is it just because it’s cost prohibitive to set up?
In: Economics
Actual ELI5: Tax avoidance of this kind is done by faking business expenses. So you start business1 in high tax country and business 2 in low tax country. Your business1 is taxed on income but oh dear it seems they barely made anything this year because they paid so much to business2 in consulting fees, asset rentals, and purchases. You make sure business 2 takes huge fees/payments from 1. So business 1 is barely taxed while business 2 is taxed, at a lower rate, for all the “income” from business 1.
So your regular employee working for one business can’t start a second business and have his paycheck routed to a business 2. He’s being paid as an employee of business 1 not as some liason from business 2.
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