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Offshore bank accounts.

madness
Posts: 5
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5/23/2014 7:57:33 AM
Posted: 2 years ago
So I was watching The Wolf of wall street. Basically the main character has to hide his illegally gained money in an offshore bank account, he smuggled the money into Sweden via the airports.
I'm trying to work out the purpose of offshore bank accounts, and why he, or any large compwny wouldnt hide their money just anywhere, like under their mattress. Any help on this?
YYW
Posts: 36,252
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5/23/2014 3:04:30 PM
Posted: 2 years ago
At 5/23/2014 7:57:33 AM, madness wrote:
So I was watching The Wolf of wall street. Basically the main character has to hide his illegally gained money in an offshore bank account, he smuggled the money into Sweden via the airports.
I'm trying to work out the purpose of offshore bank accounts, and why he, or any large compwny wouldnt hide their money just anywhere, like under their mattress. Any help on this?

You have the creepiest profile pic...
Tsar of DDO
Khaos_Mage
Posts: 23,214
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5/24/2014 12:59:54 AM
Posted: 2 years ago
At 5/23/2014 7:57:33 AM, madness wrote:
So I was watching The Wolf of wall street. Basically the main character has to hide his illegally gained money in an offshore bank account, he smuggled the money into Sweden via the airports.
I'm trying to work out the purpose of offshore bank accounts, and why he, or any large compwny wouldnt hide their money just anywhere, like under their mattress. Any help on this?

Because it is safer there than under a mattress, and usually makes money while sitting there (interest).
I cannot speak to the movie or illegally gained money, but the reason legal money is kept there is this:
By the wealthy on post-tax money:
they may or may not report the interest earned as taxable income, but since it is "hidden" from the government, they cannot seize it or tax it (estate tax).
By "smuggling" the money, there is no paper trail.

By corportations:
Legally earned money from overseas is already taxed by the country where profits were earned. The U.S. ALSO taxes that money as income, which, to my understanding, is the only country that does so. By not "repatriating" the money, the taxes are avoided, but the money stays overseas.
My work here is, finally, done.