Contract: proposed to work for an offshore company

C

churrusco

Registered User
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23
Hi,

First message on this forum. Apologies if has posted before, I had a quick look and didn't find something similar.

I'm currently looking for accountancy to set up a limited company. I am non-national and one of the accountancies I contacted pushed quite hard for the option of working for their off-shored umbrella company. The idea they tried to sell me is that I could have a very basic wage (say 20% tax) and earn the rest as a quarterly dividend. So now, it seems that the under the current irish law being non-national allows me to move that money to the country where I am domiciled without passing through Ireland and having to declare any taxes.

So now, I have to say I feel quite uncomfortable with this. It sounds to me like tax evasion and the less I want is to be on the spot of the tax deparments of two different countries. Said this, I am totally unaware of whether this is a common practice or not. Has anyone/a friend ever done something like this? Is it really recommendable?

Thanks for your advice.
 
Ask the accountant for a written description of what they propose. Tell them you will be asking for a second opinion and see if they are still smiling.
 
Well, to be honest the accountancy is one of the top companies in Ireland and I have a written email detailed everything. That is what pushed me up to write it in this forum, just to check whether I am being too naive and that was a common practice or was something dodgy.

Cheers.
 
This is probably not "dodgy" (ie illegal) as such but that doesn't mean that it is a good idea. It just sounds too complicated. Unless you understand it clearly, you should steer well clear. You could find yourself in a vulnerable position if the Revenue were to aggressively challenge the tax status of your "dividends".

Some of the larger accountancy firms are very fond of complicated solutions, because their main client base is large companies and multinationals who normally employ their own accountants. As a small contractor, you would probably be better off with a smaller accountancy firm, which would normally have the added benefit of lower fees.
 
I know of a former colleague (from India) who went contracting with a similar solution to that outlined above. From discussing it at the time, he readily admitted that it wasn't entirely legitimate (and that he didn't understand it), and that if the Revenue Commissioners ever came knocking, he'd be on his way back home ASAP...
 
Yes,

That is what pushes me back. This kind of things are very good for them but put you on the spot for revenue commissioners, in two countries. Better earn less money and keep a low profile.
 
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