About Tax Planning

Tax planning versus tax evasion

Before we start explaining the benefits of tax planning, we need you to clearly understand the difference between tax planning and tax evasion. Why? Because we want to keep you, your business and ours well within the margins of what is legally and fiscally allowed.

Tax planning is using legal strategies and tactics to lower one’s tax burden.

A business owner can, for instance, decide to change his business entity from a sole proprietorship to an ltd when revenues and profits reach a certain level. This may be a great way to lowering the tax burden.

Tax evasion is using illegal strategies and tactics to lower the amount of taxes due.

As another example: A business owner can also decide to create counterfeit contracts, invoices, and transactions. As a result, (s)he appears to have lower profits. This is an example of tax evasion and is a criminal offense. Therefore, tax evasion can and should be traced by fiscal intelligence services. Additionally, it should be prosecuted.

Is tax planning legit?

We all know tax authorities would love to wag their index finger here. However, taxpayers cannot and should not be kept from using legal ways to lower their tax burden. Judges have decided on several occasions that taxpayers have the right to choose the most profitable route. And that means that incorporating and using an offshore entity, therefore, is legally allowed.

Do all businesses and taxpayers have access to these kinds of tax planning tools?

Technically, yes. Unfortunately, in daily life, it proves to be more complicated than that. Most of the time, only large corporations are able to negotiate arrangements with tax authorities.

The government of Curaçao has decided to offer tax planning advantages to small and medium-sized businesses as well. They created fiscal laws that offer attractive tax arrangements for offshore based small and medium-sized businesses.

T.W.M. Trust N.V. brings you more than 25 years of experience with incorporating and managing offshore legal entities.  We gladly assist you in finding the best entity/entities for your particular situation.