from Hacker News

We set up an offshore company in a tax haven

by sgloutnikov on 10/8/21, 8:31 AM with 68 comments

• by pembrook on 10/8/21, 9:42 AM

  I think what’s most surprising about both the Panama papers and the Pandora papers, is the total lack of Americans in both.

  If you were to believe popular media narratives, rich Americans would be the number 1 clients of most of these firms.

  But they aren’t, and if you adjust by percentage of rich people, the US is dramatically underrepresented.

  I think there’s two contributing factors to this:

  1) The US has relatively low capital gains and inheritance taxes as compared to most countries in Europe and elsewhere, and since most rich people only care about capital gains and inheritance, it makes tax evasion less profitable when done successfully

  2) The power of the US treasury to enforce draconian global reporting laws like FATCA and FBAR and global tax. This cannot be overstated. The US can cut off your banks ability to trade in dollars—-which is effectively a death sentence for a bank. Therefore pretty much every bank on earth is willing to comply.

  In the US, the problem isn’t offshore tax evasion, it’s the actual domestic tax code itself which allows for all the loopholes!

  Meanwhile, if you’re an average joe American expat living abroad, your financial life will be a nightmare since the US automatically assumes you’re some rich tax evader. Good luck opening even a basic bank account while abroad.

  It’s easier for a non-American to create an anonymous shell company inside the US than it is for an American exchange student to open a bank account while abroad.

• by mkingston on 10/8/21, 9:15 AM

  It occurred to me in the wake of the release of these Pandora papers that mass availability of tax avoidance could be one way of shutting down (almost) any availability thereof. Worded cynically: bring tax avoidance to the middle class and the poor, and it'll be shut down promptly.

• by harvie on 10/8/21, 10:57 AM

  Parliament elections in Czech Republic will start in one hour. I wonder if results for current PM Andrej Babiš will get affected by his affair regarding Pandora papers. But his voters are totaly brainwashed and beleive that Pandora papers are fake news crafted by Czech interrest groups with sole purpose to impair his election score.

• by shapefrog on 10/8/21, 9:15 AM

  1) I am happy NPR have covered this and many subjects well over the years, here they are calling back to their 2012 work on the subject.

  2) I am sad that despite the comprehensive coverate of the subject the 'revelations' are a shock to people.

• by sumedh on 10/8/21, 12:07 PM

  Can someone on HN setup a startup which offers a website where normal people can setup a company/bank account in a tax haven completely online so that the rest of us can have the same advantages as rich people.

• by schnebbau on 10/8/21, 9:41 AM

  The way I understood it, correctly setting up an offshore company for tax avoidance is expensive -- there's no benefit unless you are already a multi-million $ company. This is because you actually need a presence (including employees) in the haven country. So if that presence costs more than the tax you're hoping to avoid, then it's a net loss.

• by spurgu on 10/8/21, 2:15 PM

  Mods please mark this as [audio] and perhaps [2012].

• by _hilro on 10/8/21, 11:43 AM

  2012...

  FTA:

  > Note: This episode originally ran in July 2012.