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Tax Advice on moving company offshore

Tax Advice on moving company offshore

Old Apr 16th 2012, 9:23 pm
  #1  
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Default Tax Advice on moving company offshore

Just being checky to see if any ideas or thoughts before I spend big bucks with our auditors. Mainly I would like to be better informed about issues before further discussion.

Wanting to move my company from Australia to Singapore:
- Closer to future expansion
- 17% tax versus 30% tax
- nil dividend income

Considerations for the move:
- CGT on swapping or transferring shares in current group company (Australia) to new group company in Singapore.
- Australian tax paid/payable on local operations - but what on dividends remitted to Singapore
- Thinking of selling a few before relocation - so CGT implications if using the funds to acquire more capital ependiture (can gain be offset?)

Implications to determine Singapore as being non resident:
- 3 of 4 directors will be located in Singapore, 2 of which are Australian residents (ie even with move will be difficult to treat them as non resident for tax due to family and home ownerships)
- Australia has currently 12 offices/operations
- South East Asia will have 36 offices/operations over next 18 to 36 months.
- 60% shareholder based in Singapore

Each office/operation cost us $30m to construct, their market value recently is about $90m each.
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Old Apr 16th 2012, 11:51 pm
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Default Re: Tax Advice on moving company offshore

whilst I've been involved in sorting out the tax ramifications of moving companies from various onshore/offshore jurisdictions, I have no experience of the two countries that you mention, so can't help you. I would strongly suggest that you use the specialist tax department of one of the major international auditors as they will have their own offices in both countries and hence will be able to cordinate their responses. It will cost you both in time and money, but it will be well worth it as if you get the wrong advice it could end up costing you a lot more, not only in terms of taxes but nightmares as well. From what you have outlined, in my opinion, it shouldn't be complicated for one of the major auditors to get the answers you need. By going to them, you will always be able to sue them if they get it wrong.
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Old Apr 16th 2012, 11:54 pm
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Default Re: Tax Advice on moving company offshore

Originally Posted by dfjordan
whilst I've been involved in sorting out the tax ramifications of moving companies from various onshore/offshore jurisdictions, I have no experience of the two countries that you mention, so can't help you. I would strongly suggest that you use the specialist tax department of one of the major international auditors as they will have their own offices in both countries and hence will be able to cordinate their responses. It will cost you both in time and money, but it will be well worth it as if you get the wrong advice it could end up costing you a lot more, not only in terms of taxes but nightmares as well. From what you have outlined, in my opinion, it shouldn't be complicated for one of the major auditors to get the answers you need. By going to them, you will always be able to sue them if they get it wrong.
Yes agree, but before I walk in I wish to be aware of considerations, so I can be somewhat prepared if that makes sense. More on key issues to consider.

Need not be confined to Australia to Singapore, just experiences or concepts worth putting on my radar.

Last edited by RedDragon2008; Apr 16th 2012 at 11:55 pm. Reason: Additional paragraph
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Old Apr 17th 2012, 7:22 pm
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Default Re: Tax Advice on moving company offshore

It´s not as simple as we would wish to come up with considerations. Considerations will depend a lot on the workings of both Australian and Singapore ( or any other country for that matter), tax laws both corporate and individual. Double tax agreements will also be of importance. You really need to sit down, firstly with tax experts in Australia and tell them just what it is you are thinking of doing and why. Then let them come up with the first things that come off the top of their heads; in effect a brainstorming session; it´s well worthwhile. When you´ve got those out of the way, you can move on to getting them to talk with their counterparts in whatever country you think may be more advantageous to you, and once you´ve made your decision as to which jusrisdiction you prefer, you can then go into the nitty gritty.
It sounds like you have a decent size operation and you don´t want to make the wrong decision as it could really end up costing you a load. In principle, a country like Singapore is far more tax friendly than say Australia, where they will continue to want their taxes on your local profits regardless of where you decide to locate your legal holding company and they go out of their way to make life easy for businesses to operate from there. As an example, it´s quite possible for a country to decide that a company is managed and hence tax resident based on where decisions are made. I´m not saying they will, but I´ve known cases where one country has taxed the profits of a subsidiary in another country just because it´s management decisions were made in the first country.
So once again, my advice would be, spend some money on an exploratory meeting with tax experts in your auditors´company; if the result of the meeting is a decision to move, then it was money well spent. If the result is to stay where you are, it´s also money well spent as you will have at least made your decision based on good advice.
Your questions with regard to CGT, dividens tax etc will be very easy for your auditors to answer. Unfortuantely I know nothing about Australian tax so can´t assist, but your quesions should be run of the mill for them.
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