Not All Offshore Payment Schemes Are Legitimate

Forty five Swedish dentists could be about to find themselves in some serious hot water from their local tax authorities. It is alleged that between them they have dodged more than 8 million pounds worth of tax by funnelling the money through the Isle of Man. The Swedish Tax Agency and the National Economic Crimes Bureau are currently investigating what is suspected to be a 113 million kronor tax bill dodge.

The dentists avoided tax by placing the funds in the Isle of Man via Belgium and the Netherlands. A Stockholm subsidiary of a Dutch based company set up a scheme for the dentists to facilitate this. Investigators have confirmed that the scheme worked by the dentists paying themselves a small wage while the rest of their salary was deposited into life assurance policies held in the Isle of Man. If they are found guilty the dentsists will not only have to pay back the taxes due but could also face hefty fines and even possible jail time.

This case helps to highlight that not all payment schemes are legitimate. As an individual it is vital that you get confirmation of a POSITIVE legal opinion from your payroll provider for any schemes that they may run. It is this positive legal opinion that will form form the basis of any defence should any wrong doing be suspected from the relevant tax authorities. In a funny sort of way it also helps the image of the under pressure Island at the heart of this. By being open to information sharing (and not acting as a tax haven) the fraud associated with the life policies in the Isle of Man was easily discovered and traced back to the true beneficiaries.


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