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When one corporation chooses to process their money through a tax haven, i.e. a country that effectively provides no Income/Corporate/Dividend/etc... tax, how do they make use of it later?

For instance, Google Bermuda holds a lot of money in there that is away from US jurisdiction, but as soon as Sergey or Larry want to buy a new boat, or a house, or whatever, how would they do it?

Wouldn't the money, when it arrives at their personal account, be subject to Income Tax anyway?

Ale Morales
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    You're assuming that they want to spend the money in the US, which isn't necessarily the case. – TTT Feb 24 '16 at 19:00
  • For starters, most of the interesting things can simply be bought by that offshore corporation - usually there's no need to directly own something, it's enough if it's owned by a legal entity that you control. – Peteris Feb 24 '16 at 23:33

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Part of the purpose of a tax haven is retaining more capital for reinvestment. Then you have more control over how, when and where you pay taxes. Once the capital has been retained in your haven you can strategically deploy it to other favorable locations on the globe. Should you ever want part of it to hit a personal account in the US you'd have a tax liability. But at this level you could just put your ownership of that account up as collateral on a loan and buy your boat that way instead.

quid
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