Tax planning on a global scale to minimize corporate tax burden is a highly complex and cautious task. It must strictly comply with national tax laws and international tax rules (such as the OECD's BEPS Action Plan). The following is a professional framework analysis, for reference only for compliance planning： --- ###**1. Core principles and red lines of compliance** 1. **Compliance with anti-tax avoidance regulations** - Avoid triggering CFC (controlled foreign company) rules, transfer pricing adjustments, and general anti-avoidance clauses (GAAR) in various countries. -Pay attention to the impact of the EU blacklist and the global minimum tax rate (15% GloBE rule) under the inclusive framework of the OECD on traditional tax havens. 2. **Economic substance requirements** -Tax depressions (such as Cayman and BVI) must meet the local economic substance law, otherwise they cannot enjoy tax exemption. --- ###**2. Core elements of architecture design** #### **1. Network of Holding Companies and Tax Treaties** -**Location of the top-level holding company** Preference is given to jurisdictions with extensive tax treaty networks and moderate tax rates (such as the Netherlands, Luxembourg, and Singapore) for collecting dividends, interest, and royalties, and enjoying preferential tax rates under the agreement (such as 0%-5% withholding tax). -**Intermediate control function** Through the establishment of multi-tier intermediate holding companies (such as Hong Kong→the Netherlands→Luxembourg), the superposition effect of the agreement is used to reduce the tax burden on cross-border capital flows. #### **2. Profit transfer path** -**Separation of ownership of intangible assets** Concentrate intellectual property rights (IP) in low-tax areas such as Ireland and Singapore, and transfer profits to IP holding entities through royalties (subject to the transfer pricing rules of BEPS Action Plan 8-10). -**Supply chain restructuring** Set up procurement/distribution centers in low-tax areas (such as Switzerland and Hungary) to achieve profit retention through cost-sharing agreements (CSA) or commission arrangements. #### **3. Optimization of financing structure** -**Hybrid financial instrument design** Use debt-equity hybrid instruments (such as convertible bonds and perpetual bonds) to make interest payments deductible before tax in the country where the payer is located, and at the same time, the country where the recipient is located is tax-exempt according to dividend treatment (subject to local mixed mismatch rules). -**Back-to-back financing structure** Cross-border loans are made through financing hubs such as the Netherlands and Ireland, taking advantage of interest withholding tax exemptions. --- ###**3. Application of key tax tools** 1. **Tax treaty benefits** -Use Article 10 of the China-Netherlands Tax Treaty (0% withholding tax on dividends) and Article 12 of the China-Singapore Agreement (royalty withholding tax reduced to 6%). 2. **Offshore exemption system** -The territorial taxation system of Hong Kong and Singapore: Offshore income is not taxed (proof of business substance is required). 3. **Use of EU directives** -Parent company-Subsidiary Directive (tax exemption for dividends), interest and Royalties Directive (tax exemption for payments in the EU). --- ###**4. Risk control and dynamic adjustment** 1. **Continuous compliance monitoring** -Regularly review whether the structure complies with the global minimum tax calculation rules under BEPS 2.0 (Pillar 2) to avoid tax rebates to 15%. 2. **Dispute response plan** -Prepare transfer pricing documents (Master File/Local File) and country reports (CbCr) to respond to investigations by tax authorities. 3. **Exit strategy design** -Preset equity exit path (such as capital gains tax exemption for the sale of equity through a Singapore holding company). --- ###**5. Typical case reference (simplified model)** **Architecture chain：** Chinese operating company → Hong Kong trading subsidiary (profit retention) → Dutch holding company (agreement hub) → Luxembourg IP holding company → Cayman top-level holding (only for control arrangements, economic substance requirements must be met). **Profit flow：** The Chinese company pays royalties to Luxembourg (tax rate of 2%), the Dutch company receives dividends (withholding tax of 0%), and the final profit is exempted from taxation in Hong Kong.<5%. --- ###**6. Important reminders** -**Sensitivity to legal dynamics** The world's lowest tax rate (implemented in some countries from 2024), digital service tax (DST) and national anti-avoidance legislation (such as the US GILTI tax) will significantly compress the space of traditional structures. -**Professional team training** It is necessary to work with international tax lawyers, the Big Four accounting firms and local compliance consultants to design the whole chain to avoid the failure of the structure due to information asymmetry. This plan needs to be customized according to the specific business model of the enterprise, the type of related-party transaction and the tax resident status of the country in which it is located. It is strictly prohibited to apply it directly. Aggressive tax avoidance may cause criminal risks, so compliance must be the bottom line.