APPLICATION OF OFFSHORE SCHEMES IN TAX PLANNING OF BUSINESS ACTIVITIES

Keywords: offshore zones, tax planning, offshore schemes, investment operations, reinvoicing, reinsurance contract, toll manufacturing, offshore intensity index

Abstract

The article is devoted to the peculiarities of tax planning using offshore schemes and operations. The purpose of the study is to analyze the positive and negative properties of offshore zones and the feasibility of using offshore schemes in the tax planning of Ukrainian enterprises. The study used dialectical, systemic, analytical, abstract, logical and historical methods of economic analysis. Characterizing the meaning of the term «offshore companies» it is noted that these are companies that are registered in one country, and operate and make a profit in other countries, such companies do not pay corporate taxes. The relationship between offshore zones and the mechanism of tax avoidance has been established. The main directions, ways and methods of tax avoidance through offshore zones are determined. The main schemes of tax avoidance using offshore zones are investigated. We argue that the offshore tax regime has a number of advantages over national tax rates. It has been established that offshore activities become a key way of enterprise tax planning, which requires professional knowledge in the field of tax legislation, both national countries and offshore jurisdictions. The analysis of offshore business relations testifies significant impact of offshore on the world economy. Companies that use offshore schemes and transactions gain a significant advantage both in the field of registration of their activities and in terms of taxation. The specific characteristics of offshore business are determined, and also the possibilities of application of offshore schemes in tax planning in Ukraine are estimated. The advantages and disadvantages of offshore entrepreneurship are described. It was noted the offshore zones are threaten for developed and developing countries because subjects are able avoid or reduce taxes illegally. It is emphasized the strengthening of financial control of offshore operations by government agencies in Ukraine. The practical significance of the article supposes the possibility of applying the described offshore schemes in the tax planning of business activities. Knowledge of the methodology of offshore operations will help the entrepreneur to apply a certain offshore scheme in their own business and reduce the tax burden legally.

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Published
2021-08-31
How to Cite
Shamborovskyi, G. (2021). APPLICATION OF OFFSHORE SCHEMES IN TAX PLANNING OF BUSINESS ACTIVITIES. Economy and Society, (30). https://doi.org/10.32782/2524-0072/2021-30-49
Section
INTERNATIONAL ECONOMIC RELATIONS