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⍰ ASK What is the role of offshore banking in tax planning?

Offshore banking plays a significant role in offshore tax planning, as it provides individuals and businesses with access to financial services and products in a jurisdiction with low or no taxes and favorable tax regimes.

Offshore banks offer various financial products and services, such as savings accounts, investment accounts, credit facilities, and foreign currency exchange, which can be used for tax planning purposes. For example, individuals and businesses can use offshore bank accounts to hold their investments, income, or other financial assets in a jurisdiction with lower taxes, which can result in reduced tax liability.

However, it's important to note that offshore banking can also be associated with illegal or unethical activities, such as tax evasion, money laundering, and fraud. The use of offshore banking for tax planning purposes can result in significant tax liabilities, legal consequences, or penalties if it is not done in compliance with all relevant tax laws and regulations.
 

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