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ELI5 How do rich people just hide their money in offshore bank accounts? Do they just call up the bank and say I want transfer such and money? How come the original bank doesn't catch on? (lemmy.world)

submitted 2 months ago by Don_Dickle@lemmy.world to c/explainlikeimfive@lemmy.world

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[-] scaramobo@lemmynsfw.com 3 points 2 months ago

This. Why is this system not exploitable by us? What do we need ti make this work for us? Also: if the system is known, why is nothing done about it?

[-] AA5B@lemmy.world 4 points 2 months ago

It’s not that easy to do something about it. Generally you’re taxed in the country where you earn money, but corporations have options in where they count income and where they count losses, to most benefit them.

A regular person in the US can’t do this because their employer reports salary income to the IRS as US income. What income do you have that you can claim was earned in a low tax country? Have you done all the legal work and paid appropriate taxes in that country?

Sometimes you’ll read about repatriating money. How do you legally use that money you have in a low tax country without incurring taxes bringing it back to wherever you are?

[-] SL3wvmnas@discuss.tchncs.de 2 points 2 months ago

I personally know someone who uses something he calls "Dutch reach-around" and while I'm hazy on the details, I know it starts with some complex setup of a charitable foundation in your home country, with real people and real money and a network of firms and other foundations in the Netherlands that are somehow interwoven. He told me "setup is cheap, only 5 million dollars up front, you can ask my tax attorney for the deets"....

That was a nice move, but no thank you, this is not the kind of money I have lying around.

Bonus how us firms do it, I imagine this costs also a lot of money up front...