Offshore Tax Planning for Project Financing

Offshore Tax Planning for Project Financing[box size=”large” style=”rounded”]Historic structures: transfer pricing, diverted profit tax, carried interest no longer function for offshore tax planning.[/box]

[box type=”alert” size=”large” style=”rounded”]Investment vehicles require a look at what the future is to be.[/box]

[box type=”info” style=”rounded”]Governments and governance look through everything. Everything is considered a tax avoidance scheme except that which is formally recognized and registered as not.[/box]

[box type=”note” style=”rounded”]Excluded does not mean to include it just in case.[/box]

Practical application examples of asking the right question:

1) Direct investment in Real Estate projects are subject to capital gains tax.

2) Providing project financing via a Clean Nominee Bank Account, pension fund structure, is entirely different than a direct investment into real estate. In other words, it depends on how the pension fund, which owns the finance company, is providing project financing. For example a profit share of a development is legally different to the sale of those properties by that pension fund.

Project financing is not a gain on real estate it is a gain on having put up the money and Double Tax Agreement* specifically deals with capital gains with exception.

[box type=”tick”]* see s.323 Tax Exemption from FIRPTA for U.S. property exemption[/box]

Knowing the right questions for offshore tax planning and the right structure are reasons tax attorneys with experience need to be engaged.

Offshore tax planning photo credit: sun-dazed on VisualHunt.com / CC BY-SA


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