Tax Havens
TAX HAVENS
DEFINING
Tax Havens
• Def 1:A tax haven is a country or territory where certain taxes are levied at a low rate or not at all. • Def 2: Tax haven or fiscal paradise are terms used to refer to a jurisdiction which enables its foreign residents or companies to reduce their tax liabilities from their homelands.
• Def 3: "What ... identifies an area as a tax haven is the existence of a composite tax structure established deliberately to take advantage of, and exploit, a worldwide demand for opportunities to engage in tax avoidance." (The Economist - description by Geoffrey Colin Powell )
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Def 4: US Government Accountability Office was unable to find a satisfactory definition of a tax haven but regarded the following characteristics as indicative of a tax haven: 1) nil or nominal taxes; 2) lack of effective exchange of tax information with foreign tax authorities; 3) lack of transparency in the operation of legislative, legal or administrative provisions; 4) no requirement for a substantive local presence; 5) self-promotion as an offshore financial center.
TYPES of Tax Havens
1) Universal Tax Haven is a country's offer to entrepreneurs and investors with a wide range of financial and tax benefits. Such havens include colonial territories and also mini countries. In order to attract both entrepreneurs and investors they offer attractive political, economic, fiscal and judicial arrangements.
2) Special Tax Haven allows for special types of activities. A result of such an orientation a situation may be created in which high taxes exist concurrently with the low fiscal rate for particular economic branches or tax payers.
BENEFITS and ADVANTAGES of tax havens
• profit transfer is a term used to describe profits achieved from selling goods and services at cost. As a result profits are higher in the country where corporation tax is lower. • rotary company is a company which can be bought or set up in one of the tax havens.
DEFINING
Tax Havens
• Def 1:A tax haven is a country or territory where certain taxes are levied at a low rate or not at all. • Def 2: Tax haven or fiscal paradise are terms used to refer to a jurisdiction which enables its foreign residents or companies to reduce their tax liabilities from their homelands.
• Def 3: "What ... identifies an area as a tax haven is the existence of a composite tax structure established deliberately to take advantage of, and exploit, a worldwide demand for opportunities to engage in tax avoidance." (The Economist - description by Geoffrey Colin Powell )
•
Def 4: US Government Accountability Office was unable to find a satisfactory definition of a tax haven but regarded the following characteristics as indicative of a tax haven: 1) nil or nominal taxes; 2) lack of effective exchange of tax information with foreign tax authorities; 3) lack of transparency in the operation of legislative, legal or administrative provisions; 4) no requirement for a substantive local presence; 5) self-promotion as an offshore financial center.
TYPES of Tax Havens
1) Universal Tax Haven is a country's offer to entrepreneurs and investors with a wide range of financial and tax benefits. Such havens include colonial territories and also mini countries. In order to attract both entrepreneurs and investors they offer attractive political, economic, fiscal and judicial arrangements.
2) Special Tax Haven allows for special types of activities. A result of such an orientation a situation may be created in which high taxes exist concurrently with the low fiscal rate for particular economic branches or tax payers.
BENEFITS and ADVANTAGES of tax havens
• profit transfer is a term used to describe profits achieved from selling goods and services at cost. As a result profits are higher in the country where corporation tax is lower. • rotary company is a company which can be bought or set up in one of the tax havens.