Tuesday, August 24, 2010

Transfer Pricing, Offshore Reinvoicing, and Layering

"Import, export and service transactions can be made more tax-efficient if they’re carried out through offshore companies. Using an offshore company as an intermediary party between sellers and buyers of products or services in different countries allows profits to be accumulated offshore. This is often called Transfer-Pricing.

Such offshore-companies are generally called marketing or export consultancies, and, with nominees handling all offshore company administration such as phone calls, e-mails or faxes, the appearance of the company is greatly enhanced.

Although invoicing is invariably carried out via the offshore company, the goods can, nevertheless, normally be delivered direct from seller to buyer. " [ Source ]

"Offshore re-invoicing is the use of a tax haven corporation to act as an intermediary between an onshore business and his customers outside his home country. The profits of this intermediary corporation and the onshore business allow the accumulation of some or all profits on transactions to be accrued to the offshore corporation. It should be noticed that a similar structure can be utilized by an importer." [ Source ]

See: "Dmitry Firtash back into the gas business in Ukraine" - Firtash is PoR's money bag.

"Layering...is the first attempt at concealment or disguise of the source of the ownership... by creating complex layers of financial transactions designed to disguise the audit trail and provide anonymity. The purpose of layering is to disassociate the illegal monies from the source of the crime by purposely creating a complex web of financial transactions aimed at concealing any audit trail as well as the source and ownership of funds.

Typically, layers are created by moving monies in and out of the offshore bank accounts of bearer share shell companies through electronic funds' transfer." [Source ]

See this and this

Does a man like president Yanukovych , so closely associated with highly lucrative but banal scams [including this one] deserve 'the benefit of the doubt'? [See previous blog ]

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