Second move: Fast loans group lends cash to itself
In 2012, when Fatcat reached 43 million Euro in profits, the company paid only 366,762 Euro taxes on profits. This represents only 0.7 per cent.
Malta charges companies at the highest rate of income tax - 35 per cent - on their profits. But if the company's activities and shareholders are mainly based abroad, they have a refundable tax credit mechanism that results in a reduced tax rate on income or gains that can go as low as five per cent.
Additionally, in Malta there is no withholding tax on dividends, interests and royalties. And Maltese tax on capital gains for non-residents, which should include Boyko's purchase of shares in 4finance, is a whopping zero per cent.
Boyko bought out the rest of the company in 2013. According to the signed financial statements for 2013, Fatcat Investment Limited (then called FCI) had 57 million Euro profits before taxation. But it paid only 512,501 Euro in taxes. An impressive 0.9 per cent.
4finance then embarked on a bizarre system of granting loans to its own payday loans Ohio companies, thus draining the profits of its European subsidiaries and centralising the cash flow in Malta.
In this way, 4finance Malta Ltd collected almost 68 million Euro in loan interests between 2013 and 2015 and shifted profits from other countries to the tax-friendly Mediterranean nation.
Because these 11 to 13 per cent rates were high, they demanded high interest rates in shareholder loans between the parent company and subsidiaries who were providing dozens of thousands of small loans in many countries
After his buy-out of 4finance in 2013, Boyko soon established full control over the group, liquidated FCI Investments, and now - with the assistance of two Latvians who were at the helm of Fatcat, Uldis Arnicans and Edgar Dupats - controls the whole group through a Cyprus company, Tirona Limited.