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MECHANISMS OF FUNCTIONING OF OFFSHORE JURISDICTIONS IN THE WORLD SYSTEM

Journal: International Journal of Management (IJM) (Vol.11, No. 4)

Publication Date:

Authors : ; ;

Page : 500-510

Keywords : : Offshore schemes; Offshore financial centers (OFC); Money laundering; Tax havens; Offshore schemes legislation; Investigation of crimes; Money laundering;

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Abstract

The article defines the essence of the mechanisms of functioning of offshore jurisdictions, which include: the stepping stone method, which consists in the division of assets among different jurisdictions; credit scheme, which involves providing loans at interest and makes it possible to transfer funds to offshore; transfer pricing, which provides for the sale of goods to the OFC residents at a lower price for subsequent resale for profit, which will be declared in the OFC (trading scheme); payment of royalties, which centers around the registration of copyrights, followed by the transfer of rights to a resident of a full-tax jurisdiction in exchange for the corresponding payments; the application of tax hybrids. The methods and schemes specified can only be applied in case of the presence of double taxation conventions among the jurisdictions involved in the schemes; they can be integrated into more complex mechanisms. Double Irish is the most famous mechanism that has simultaneously absorbed several methods. However, the mechanisms specified are not unitary or unique.

Last modified: 2020-05-19 22:25:38