What is Offshore Account and companies let me explain ( Admin Please dont merge)

[Mughal Badshah]

A very simple example to explain offshore account.


Suppose you get a quarter you put it ina 'money box'. The 'money box' is on a shelf in your closet. Your momknows this and she checks on it every once in a while, so she knows when youput more money in or spend it.Now one day, you might decide "I don't want mom to look atmy money." So you go over to Johnny's house with an extra 'money box' thatyou're going to keep in his room.

You write your name on it and put it inhiscloset. Johnny's mom is always very busy, so she never has time to check on his'money box'.
So you can keep yours there and it will stay a secret. Now allthe kids in the neighborhood think this is a good idea, and everyone goes toJohnny's house with extra 'money box'.

Now Johnny's closet is full of 'money box' from everyone in theneighborhood. One day, Johnny's mom comes home and sees all the 'money box'.She gets very mad and calls everyone's parents to let them know

 

[EngrHaseebShahid]

hahahahahah great bro

 

[Rabwah]

Very good example

 

[Shahid Abassi]

A good example misquoted by the thread starter actually. You missed the main point. The problem is that most of these kids are stealing this money from their parents and hiding it in Johnny's room. It, in most cases is not their money.

 

[MisterX]

good analogy :)

 

[crankthskunk]

Another vital point missed by the starter. Fonseca wasn't just allowing the "money box" to be placed in their vaults, it was providing the services. The services which included arranging people who were willing to declare that they are the "beneficial owners" of the account and not the account holder. That's how the actual account holders and real beneficiaries could save tax in their countries on the premise that the actual beneficial owners are separate legal entities from them.

For these services a hefty fees was charged to the clients, which off course included the payment to the "sacrificial lambs" who are willing to be declared bogus "beneficial owners" for fees. Such use of "off shore" companies could be illegal.

Hussain also mentioned the word " Avoidance" of tax. If you are declared as "benefiting" from an taxable activity in your country or outside of it then you are responsible for the tax unless you qualified as non-resident, for which you have to spent a qualifying period outside the country. This is the only way to avoid taxes in the Western Countries.

But as I said Pakistani journalists are thick they cannot think logically and do not know the procedures in the western countries.