[CaymanCruiser]

There are two dimensions here, one is the tax liability and the second is regulatory compliance.

Yes, the tax liability is significantly reduced when using offshore structures and I don't necessarily see this as a bad thing especially since an ultra-low corporate tax rate makes it possible to offer our customers services at a lower price than otherwise - I see this as a good thing.

The second is that regulatory compliance is much, much, much easier especially when working in industries like finance, insurance, or crypto. The flexibility and clarity of the regulatory climate in offshore jurisdictions is a huge advantage as it makes it possible for us to focus on doing business rather than narrowly tiptoeing an arbitrary and complex regulatory line as is the case in "home" jurisdictions like the US or the EU. This is further compounded when you have a distributed workforce located in various jurisdictions (which sometimes changes on a week-to-week basis).

[bikeshaving]

> an ultra-low corporate tax rate makes it possible to offer our customers services at a lower price than otherwise - I see this as a good thing.

The claim that you’re transparently passing the savings of tax avoidance onto consumers rather than charging market-rate and pocketing the difference is both unlikely and unprovable. And even if you were charging less, this would essentially amount to an unfair, extra-legal competitive advantage.

[CaymanCruiser]

> ...unfair, extra-legal competitive advantage.

It is not unfair, and it is not extra-legal. Anyone can offshore their company and in some cases it can take less than an day (incorporating an LLP in the UK takes a couple of hours) with virtually zero barriers of entry, all fully compliant with the relevant legislation.

If legal regulatory arbitrage (through tax havens) is unfair, then the corollary is that any kind of business profit arising from utilising uncommon knowledge is unfair. I think this position is untenable.

[egman_ekki]

I thought most OECD countries have rules for companies being tax liable at their "effective place of management" and "arms length" etc principles to prevent funneling money to tax havens. Or is it just the correct loopholes you need to know about to ignore all of this?

[pas]

It's very much a big proxy war between big economies. Currently the countries benefit from tax havens where growth is the highest (because these investment/offshore vehicles/vessels are low tax and the yields are reinvested, and the tax is reaped by the country where it gets invested; even if the profit was originally from a different country - but it's transferred to the tax haven via various schemes, like the intellectual property royalty payments and so on.)

https://repository.law.umich.edu/articles/717/

[bikeshaving]

> If legal regulatory arbitrage (through tax havens) is unfair, then the corollary is that any kind of business profit arising from utilising uncommon knowledge is unfair.

This syllogism is so unsound that I’m not sure how to respond. I don’t think I’m arguing that, and I don’t think that using corporate tax havens is merely “using uncommon knowledge.”

[jonny_eh]

> It is not unfair, and it is not extra-legal

Then why are you using a pseudonym?

[NamTaf]

"If you have nothing to hide, then you have nothing to fear" isn't a reasonable position to hold, and your statement basically amounts to it. There's plenty of reasons to want to stay anonymous when talking about business such as this.

To clarify, I don't necessarily agree with his position, but I disagree with your proposition that he is using a pseudonym for that reason.

[ehvatum]

If such a scheme were the only thing allowing you to make a profit, would you appreciate this guy drawing attention to it? In fact, you could protect your operation by submitting numerous tips to tax agencies across the world, causing his business to fail due to the immense cost of litigating such complex cases, even though he would be cleared if he could afford the defense. Everyone gets the right message: the public hears that tax havens "don't work", whistleblowers learn to keep quiet, regulators notch up another win, and the truly powerful get to continue dodging taxes.

[ryandrake]

> makes it possible for us to focus on doing business rather than narrowly tiptoeing an arbitrary and complex regulatory line

This can be solved by simply operating well within the legal line. If you’re operating so close to the border of what’s illegal that you’re “tiptoeing the line” then maybe that is the root problem.

I’ve been in several businesses and not once ever had to stop and ask myself “is what I’m doing technically legal?”