New Tax Avoidance Rules : A new directive regarding tax avoidance rules has been officially adopted by the European Council. The Directive concerns corporate taxpayers within the member states of the European Union which includes also companies based in third countries being the subsidiaries of such companies. The new directive sets rules for preventing base erosion and profit shifting (B.E.P.S.).
New Tax Avoidance Rules : The new directive
The new directive sets out the following rules: The allowable interest to be deducted by corporate taxpayers per tax year is limited. This measure acts as discouragement to corporate entities to take advantage other jurisdictions with more favorable rules in that respect and avoid shifting debt to such jurisdictions; Exit taxation rules are established in order to prevent tax base erosion; General anti-abuse rules are established; Introduction of controlled foreign company (CFC) rules; Introduction of rules against the manipulation of national tax systems for reducing overall tax liability.
Application of the new rules
The first stage will include the transposition of the new directive into member states national laws and regulations which is set until the end of year 2018. The next stage that follows is the transposition of the exit taxation rules set to be in place by the end of year 2019. Interest limitation Rules that are equally effective to the ones included in this directive by Member states are allowed to apply them.This remains subject to change until an agreement is reached for determining a minimum standard.
How to Avoid Tax Legally
The best way to plan your tax optimization legally and to pay very low taxes is to go ahead with a Cyprus Company Registration. A Cyprus company offers you a multitude of tax benefits legally without having to feel awkward and to fear that at any moment you will find yourself and your business under the scrutiny of the Law. For more advice, information and informative reading go to the Cyprus Company Registration link.
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