International Tax Planning Consultancy
At Libor, we believe that the effectiveness of the tax planning is fundamentally based on its ability to achieve three core objectives:

• Create, protect and optimize value in the context of your organisation's business objectives
• Manage a wide range of tax related risks from carrying on your business; and
• Ensure compliance with tax laws and reporting requirements.

Our tax planning and advisory services are focused on optimizing tax outcomes and managing risk, both in respect of strategic transactions and day to day operations.

Tax efficient structures

At Libor, our team of experienced Cyprus tax professionals can assist our clients in providing tax efficient solutions for their international business operations.

We would first study their existing structure and would suggest a sustainable Tax Planning Structure that will have no or reduced tax liability. We will specifically look into the following categories depending on the circumstances:

• Avoidance of double taxation (partly or wholly), and
• Avoidance of single taxation / double non taxation (partly or wholly).

This could involve the use of Cyprus Companies, International Trusts or other offshore tax vehicles (SPVS).

Tax risks

During the planning stage we will particularly look into the tax (technical) risks involved and offer our advice so that the risks are minimized and or eliminated. We achieve this by ensuring that key principles are identified from the outset so that they are clearly communicated and understood and that appropriate decisions are taken at the planning stage. The tax (technical) risks involved are:

• Tax residency risk
• Permanent establishment ("PE") risk
• Beneficial ownership risk
• Value Added Tax ("VAT").

A common diversion of actual corporate governance from the tax model is that actual management and operation of investment structure in reality diverts from the tax model. The result of diversion could mean different (higher) taxation:

• Denial of double tax treaty benefits
• During the life of the structure
• On exit.

As an example of a diversion of corporate governance from the tax model is that directors / management make key business decisions in the "wrong" jurisdiction which could lead to a denial of the double tax treaty and its benefits.

Getting it wrong (An example)

The key principle is: directors / management must make key business decisions in the "right" jurisdiction. Click to View

Other tax risks

Other tax risks that need to be considered not only at the planning stage but throughout the life of the tax planning model include:

• Strategic risk: risks affecting achievement of strategic objectives (governance, tax planning, major initiatives, M&A, etc)

• Operational risk
: risks affecting internal operations (underlying systems, access to and documentation of data, and knowledge and risks impacting tax activities embedded in business operations outside tax department, etc)

• Financial risk
: risks affecting financial processes (accounting and reporting and other regulatory regimes etc)

• Compliance risk
: risks affecting compliance of with regulatory and legal requirements and the resolution of government inquiries).


Examples of tax structures

Examples of tax structures frequently used by international businesses are:

• Holding Company Structure

• Foreign Financing branch

• Employment Company Structure

• Construction Company Structures
 • Financing Structure

• Trading Structures

• Personal Company Structures

• Shipping Company Structures
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