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What is re-invoicing?
Re-invoicing is the use of a offshore corporation to
act as an intermediary between an onshore business and
his customers outside his home country. The profits of
this intermediary corporation and the onshore business
allow the accumulation of some or all profits on transactions
to be accrued to the offshore corporation. Similar structure
can be used also by an importer.
Use of re-invoicing - example
An corporation in high tax jurisdiction
sells $500,000 of goods or services
to Germany normally every year. Let say that cost of goods
and operating expenses are $300,000.
corporation in high tax jurisdiction
earns $200,000 on its sales before
taxes. Taxes will average say $80,000 thus reducing
net profits to $120,000.
Let say that company from high tax jurisdiction
establishes a offshore company
to act as intermediary.
The onshore company sells its goods and services to
the offshore company for let say $320,000.
This company immediately sells the goods and
services to the German client for $500.000.
The offshore company earns $180,000.
Offshore corporation pays no taxes so
$180,000is net income.
The exporting compan yin high tax jurisdiction
shows minimal profit. ($20,000).
The $180,000 in tax-free income can be
deposited in a bank account or other investment instrument according
to the wishes of the onshore company.
How is with shipment of the merchandise?
The merchandise can be sent directly to the exporter's
client.
If you have more questions about offshore reinvoicing
please contact us.
We can set up offshore company to do reinvoicing
or you can reinvoice through any of our company under
special conditions.
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