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Tax Haven Affiliate
(redirected from Tax Haven Affiliates)

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Tax haven affiliate
A wholly owned entity in a low-tax jurisdiction that is used to channel funds to and from a multinational's foreign operations. The tax benefits of tax haven affiliates were largely removed in the US by the Tax Reform Act of 1986.

Tax Haven Affiliate
A wholly owned subsidiary of an American corporation in a foreign tax haven. Prior to the Tax Reform Act of 1986, a corporation could avoid taxes by placing a certain amount of its income in its tax haven affiliate, but this benefit is generally no longer permissible.


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tax liabilities of American firms with tax haven affiliates are significantly lower than those of otherwise-similar American firms over the 1984-88 period, which may be indirect evidence of aggressive transfer pricing by firms with tax haven affiliates.
 
 
 
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