Offshore Reinvoicing
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.
