Tax Advisory
Our home country is taxing our offshore company's profits.
Controlled foreign company rules exist precisely to defeat the structure being used. Where a resident controls a foreign company (usually measured by a shareholding or voting threshold, sometimes with family and associate holdings aggregated) and that company is taxed below a specified level, the home country can attribute its income to the shareholder and tax it currently, whether or not anything is distributed.
What decides the outcome is substance and income type. Most regimes exempt a foreign company carrying on genuine economic activity with premises, people, and real decision-making locally, and target passive income: royalties, interest, dividends, and income from arrangements with no commercial rationale. A company whose director signs documents sent from the shareholder's living room fails the test on management as well as substance: many countries also treat a company managed from their territory as resident there outright, which produces the same result by a different route.
Detection is no longer difficult. CRS and FATCA data, beneficial-ownership registers, and country-by-country reporting mean the structure is visible, and attribution is commonly applied retroactively with interest and penalties across several years at once.
How LTB Resolves It
LTB tests each entity against the applicable CFC regime (control thresholds, effective rate comparison, income characterisation, and any substance or activity exemption) and states plainly which entities are exposed and for which years.
From there the work is either building genuine substance where the activity justifies it, through the corporate service providers, directors, and accountants in LTB's network in that jurisdiction, or restructuring so the activity, the management, and the ownership sit where they can be defended. Where prior years are exposed, disclosures and amended returns are prepared and filed by the licensed tax professionals in the home jurisdiction, coordinated throughout by LTB.
Questions
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