Quote:
Originally Posted by Adraco
It's all very easy.
Setup a Panama company, or almost anywhere else where taxes are low or even zero. Then that company bill your legit, US based normal day to day operation, with invoices and all, for "consultancy services" and it just so happens that those invoices for "consultancy services" amounts to just about your yearly net profit. So you are basically moving the profit, which would be taxes with US taxes, out of the country and into a company which sees much lower taxes on its profits.
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This is what I assumed is what's done. But doesn't the IRS or CRA in Canada see through that and make you defend what exactly these 'consultancy services' are and who is providing them?
My best friend comes from a fairly wealthy family, him and his sisters when they were young adults would get paid from the dad's company a couple grand a month. They didn't do any work. I wasn't jealous or envious, not in my nature to be that way BUT I could never understand how the taxman never investigated and I think the company was audited once.