International tax planning

Summary
The principles of international tax planning have changed. It is impossible to evade taxes completely. But there is always freedom of choice: where, when, and how much to pay.

Types of tax planning

There are three types of tax planning that depend on the subject to whom “tax benefit” effect applies, such as:
1. Individual tax planning — applies to individuals willing to reduce their personal income tax expenses, including inheritance matters

2. Corporate tax planning — applies to legal entities with a view to increasing profits by lowering corporate tax expenses

3. Mixed type — applies when the tax planning effect concerns the interests of a legal

4. Entity and an individual — that is an ultimate beneficiary. The mixed type is designed to reduce corporate taxes, dividend tax payments s, personal income tax etc., to form the capital of
beneficiary with minimal tax losses.
Tax planning is divided into two regional levels:
1. Local, within the legal framework of one country or territory

2. International, within the international legal framework given inter-state agreements and the systems of laws of the countries involved in the tax scheme that was designed for the purpose of individual tax planning.

Key elements of effective tax planning are as follows:

1. Acquaintance with the client, his tax history, former strategy, analysis of the current situation, identification of their requirements and wishes for the planned tax model
2. Terms of reference drawing up and coordination with the client in reliance upon previously received information
3. Identification of disputed and problem issues, assessment of the project feasibility as a whole, with regard to the legislation of the states involved
4. Analysis and calculation of possible risks and losses arising from the application of the tax model
5. Building the best tax model in line with the terms of reference and subject to the identified risks
6. Implementing the tax model, conducting registry actions and legal activities as required and subsequently operating under the model designed.

Fundamental financial planning tool

Tax planning is a set of actions aimed at reducing tax liabilities for one or more types of taxes within the legal framework.
Being an integral part of financial planning, tax model creation involves the use of consulting and legal instruments and the development of corporate schemes aimed at reducing tax burden, tax expenses, duties and other state fees.