Looking through

Looking Through is a tax principle under which authorities disregard the formal legal status of an entity—such as a company or partnership—and focus instead on the individuals who ultimately own, control, or benefit from it. The idea is to tax income based on its real economic ownership rather than the organisational structure used to present it. This approach is commonly applied in cases where an entity appears to exist mainly for tax-minimisation purposes, allowing the tax authority to assess the underlying owners directly.

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For instance, if several individuals establish a company in a jurisdiction with very low taxes but make all strategic decisions from another country, the tax authority in the country of control may “look through” the foreign company. It can then treat the profits as belonging to the individuals themselves and tax them accordingly.