tax-law accounting
Make up a company&#39;s financial history
<p>I have a Dutch company that has been in business for about 5 years. When we registered it, we also registered a company in the US. We were advised that we did NOT need to file a tax return since we were not trading in the US with the US company.</p>
<p>It turns out we were ill-advised (or, apparently, the rules changed).</p>
<p>I talked to a business person in the US, and told me that our US company has no chance in hell to have any kind of credit history based on our Dutch one. We also have to file the tax returns we missed in the last 5 years.</p>
<p>This got me thinking. Can/should I file tax returns where I show some profit and turnover, by mirroring the Dutch company's books and turn over? The rational is:</p>
<ul>
<li>We would be paying taxes for the last 5 years (yes, again!)</li>
<li>We would be using our Dutch history for the US (the company is VERY profitable)</li>
</ul>
<p>Questions:</p>
<ul>
<li>Would this be ethically acceptable?</li>
<li>Would this be legal?</li>
<li>If we did apply for credit, will banks want to see US bank accounts with movements?</li>
<li>Would this actually help our credit rating?</li>
</ul>
<p>I know that this sounds like &quot;gaming the system&quot;. And it is. However, please remember that 1) We would be paying, rather than evading, tax 2) We are a reputable company, no scamming etc. 3) We would only be lying in terms of &quot;where&quot; the volume happened.</p>
<p>Comments?</p>

<h2>Fraud is fraud</h2>
<p>From what you say, the US company has had no revenue, no expenses, and no profit/loss. To say otherwise is what is colloquially known as a “lie”. A lie is also the term for it legally.</p>
<p>To lie in order to receive a benefit like, say, a good credit rating, is called fraud. That’s illegal in the USA; I’m not familiar with Dutch law but I suspect it’s illegal there too.</p>
