Bitcoin can make offshore companies unnecessary

There are many people in the world who are trying to reduce the amount of taxes paid. Some even seek to achieve a zero tax rate. It’s relatively easy to do - just start working with offshore zones. True, it was offshore companies that were significantly compromised after the scandal involving the Panamanian law firm Mossack Fonseca. From the servers of this company, unknown persons stole the largest base of thousands of offshore companies during the hacker attack. In May of this year, the International Consortium of Investigative Journalists (ICIJ) laid out the base in free access. This structured database is called the Panama Archive.

And this is not the only trouble for offshore lovers. The fact is that the states where able-bodied citizens live do not like it when these citizens begin to evade taxes using offshore zones. States are beginning to put pressure on offshores, which is increasing every year. For this reason, offshore companies may lose their attractiveness for large and medium-sized businesses. Law professor Omri Marian of the University of California, Irvine believes that Bitcoin cryptocurrency could be a substitute for offshore companies. In his opinion, cryptocurrency can be called " tax shelter ".

Currently, many governments are participating in joint tax crime prevention programs. Under one of these programs, more than 77,000 banks from around the world began to provide information about their clients to the Internal Revenue Service (IRS). Even Swiss banks, previously considered a safe haven for anonymous depositors, began to disclose customer data. Offshore banks also take part in this program. Thus, there are fewer places where you can save your capital without revealing your own personality.
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And here Bitcoin plays an important role. Bitcoin digital cryptocurrency wallets are not subject to the jurisdiction of any state. Bitcoins are not taxable. There is no organization that could suddenly reveal the belonging of a purse with a cryptocurrency to any person or organization without their desire. Bitcoins are a fairly convenient tool to pay for goods and services of individuals and organizations - all transactions are conducted in complete anonymity. The weak link may be customer correspondence with a supplier of goods or services. But this problem can be solved using a secure email service.



Bitcoin is accepted for payment not only by individuals and small organizations. Major corporations like Microsoft also work with cryptocurrency, albeit on a very small scale. Bitcoin can be used in complex commercial transactions with the involvement of agents acting in the role of nominees who work with local currencies. Here the scope for the work of financial organizations is huge.

And now there are no mechanisms for state regulation of these operations. There is no transaction monitoring mechanism. Yes, some operations can be revealed (as in the case of the Terrible Pirate Roberts, the founder of Silk Road), but only if the author of the transaction made a mistake by revealing his identity somewhere in the network. Therefore, owners of offshore capital are beginning to use Bitcoin.



According to Trace Mayer , the more savings will be transferred to Bitcoin, the stronger the cryptocurrency rate will begin to grow. Due to the quantitative restrictions on the number of “digital coins” of 21 million Bitcoins, the transfer of offshore dollars to cryptocurrency can lead to an appreciation of the rate from the current level (about $ 600) to $ 3 million or more. A very convenient tool for investment, by the way - you transfer your funds to cryptocurrency, and already in the process of transferring the rate of cryptocurrency is gradually increasing.

However, for private companies the transfer of a large amount of funds to bitcoins can be a difficult problem. “Although some people believe that Bitcoin accumulation is a reasonable strategy, which allows you not to pay taxes and live peacefully without fear of tax audit, large companies will not be able to“ invest ”large amounts of money in cryptocurrency without being noticed by fiscal services,” says lawyer Aaron Richter .

For companies that work with Bitcoins "in white", the transfer of foreign currency to Bitcoin is also a certain problem, especially in the United States. The fact is that the Internal Revenue Service regards cryptocurrency as a property , not a currency. This means that working with bitcoins is regulated in the same way as barter transactions. This means that in the same United States, an organization that accepts bitcoins and reports such transactions must pay $ 500 in taxes, regardless of the size of the transaction. And for each transaction have to submit the appropriate document. Anyone who receives a cryptocurrency, must determine its value at the time of receipt, so that by the time of submission of documents to correctly determine the profit or loss, with the filing of appropriate reports.



But it is in the USA. In the same Finland in 2014, Bitcoin was recognized as a financial service exempt from value added tax. For conducting operations using cryptocurrency, a license is not required here, and there are no special rules for identifying customers of Bitcoin services. And in Finland, many declare their income in cryptocurrency, despite the ability to keep everything secret.

In Australia, the government also decided to exclude Bitcoin from the list of objects of the tax base, which is subject to tax on goods and services (Goods and Services Tax, GST).

It is clear that for those companies and individuals who work with bitcoins "in black" all this does not matter. The same "offshore money", information about which has not yet had time to become public domain after the leak of Mossack Fonseca, can be slowly transferred to Bitcoin. And to learn about this will be quite difficult, if not impossible.

Interestingly, Bitcoin, despite the fact that the currency is not, is becoming increasingly susceptible to the influence of economic and political factors. So, during the trading session on June 24, the rate went up immediately to $ 120 , up to $ 679. The main factor is Brexit, or rather, the decision of the majority of Britons who participated in the referendum on leaving the EU to leave the European Union. Investors began to invest more actively in Bitcoin, considering digital currency a “safe haven”, and the rate began to grow. Gold behaves in a similar way, and on June 24 it has risen in price by more than 4%.