Re-Invoicing

Re-Invoicing

Example Of Re-Invoicing Re-invoicing is typically the use of a tax haven corporation to act as an intermediary between two companies as a more lucrative placement of profits. Typically in 0-5% tax jurisdictions. What would be an example of re-invoicing? “Company A” is buying goods from “Company B” for the price of 400.000 EUR. They expect to sell the goods for 1.000.000 EUR, which is a profit of 600.000 EUR. In Company A’s country, the company tax pressure is 30%, which means they have to pay 180.000 EUR on their profits. Let’s say “Company A” used our re-invoicing service. Our offshore entity “Company X” would then buy the 400.000 EUR goods from “Company B” and then sell it to “Company A” for example 900.000 EUR. The profit is now only 100.000 EUR in “Company A’s” country, leaving a more digestible tax bill of 30.000 EUR. This could also be brought to zero but is often not a very longterm solution towards the local authorities. In...
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