Definitely needs to have substance. Basically just think to yourself when the tax authorities eventually take me to court can I reasonably explain why I did what I did and the reason not be to avoid paying tax
No. First mistake in your calculation is that you must be owner of all 3 companies involved. Only then you can fully exploit Barbados company. Your manufacturing value of goods in Canada is 100$, you sell that for 120$, so Canada will tax 20$, Barbados company is selling your goods to US company for 200$. US company is selling that on US market for 220$. US tax 20$ of profit, Barbados company is taxable for 80$ at 2.5%, that's 2$, so you have 78$ tax free. Better is to exclude Canada and use China with which Barbados have DTA in force. Canadian authorities can see only contracts between Canadian and Barbados, but not between Barbados and US, so they can't know for which price goods are sold and where. Also Canadian jurisdiction ends at its borders, they can't have insight in company register of other countries.
Not necessarily, because unless your effective management is set up in Barbados, you will still have to pay Canadian tax, even though the company is registered in Barbados. There are many other things to take into consideration when setting up your corporate tax structure for your company, effective management is one that plays a key role.
Seems kinda unfair. What gives the Canadian govt any right over one man’s private property and the way they sell it ? The way I see it , he’s not harming anyone that way. Just saving on taxes. Using his private corporations which is “NOT” listed on the Canadian stock exchange. Also , in a totally different jurisdiction.
@@TheKhilafattv exactly, time for a new revolution. Idc if you’re white , black , Christian or Muslim etc. we all need to unite against these corrupt govts.
It's the same with every govt. At least the Canadian govt does much better with the collected taxes than the corrupt govts in developing countries. I would actually feel proud to pay taxes in Canada lol😂
Absolutely clear and onesided pristine case of Transfer pricing gone wrong. No one well informed within the TP community right now will be doing these type of insane manauvers. Dempe functions are being scrutinized deeply. Pillar 1 amount B streamlined process is not being applied yet, but if does it will cut off all these type of simple distribution structures.
Incorporation of companies/corporation are to be REGISTERED as Domestic or International companies and corporation, as Licensees, Franchisors-Owners and Franchisees where PATENTS, TRADEMARKS, COPYRIGHTS and ALL TAXES Classifications and REGISTRATIONS are Implemented amongst countries, where the businesses locations amongst countries are DECLARED addresses as SMES in businesses are Worldwide, SMALL, MEDIUM, ENTERPRISE, NON-REVERSE or FLIP, since it is also DECLARED with respective LGU units for requirements and permits, in all classifications for businesses are to APPLY, Reflected and applied in the books of the CORPORATION, respective Incorporators and its Articles.
