tax haven

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Tax haven

A nation with a moderate level of taxation and/or liberal tax incentives for undertaking specific activities such as exporting or investing.

Tax Haven

A country that has a low tax liability compared to other countries or no taxes at all. Some countries deliberately set themselves up as tax havens in order to encourage international corporations to register themselves there. Some countries that are not tax havens have loopholes in their tax codes in order to allow certain persons and companies to place some of their assets in an account in a tax haven.

tax haven

A country or other political entity that offers outside businesses and individuals a climate of minimal or nonexistent taxation. In some cases, the low taxes apply not only to those levied by the tax haven itself but also to the possibility of reducing or avoiding taxes levied in the investor's home country.

tax haven

a country which imposes low rates of personal and corporate TAXES, and which as a consequence tends to attract wealthy individuals, MULTINATIONAL ENTERPRISES and FINANCIAL INSTITUTIONS seeking to minimize their taxation liabilities. At the present time, countries operating low-taxation systems include Bermuda, Jersey and the Cayman Islands. An OECD report published in 2000 listed 35 ‘offshore financial centres’ which it classed as ‘tax havens that harm trade and investment’. The OECD defined harmful jurisdictions as those that offered zero or low tax rates but fell short in legal and administrative transparency. The latter factor makes it difficult for other countries ‘tax authorities’ to detect and observe the complex financial transactions undertaken by criminals and MNEs (MULTINATIONAL ENTERPRISES) to ‘hide’ their tax liabilities.

There are two main types of tax haven arrangements:

  1. tax exempt companies beneficially owned by non-residents of a country which pay a small annual administration fee (under £2000) in return for being exempt from income and withholding taxes; there are no capital gains or inheritance taxes. Tax haven countries themselves ‘gain’ from the creation of local employment and the extra income this creates, often in an impoverished country or a country lacking other resources (e.g. the Channel Islands and the Isle of Man);
  2. international business companies that are ‘accommodated’ by ‘designer’ taxation, whereby tax havens ‘tailor’ rates of tax to help individual MNEs to minimize their ‘onshore’ tax liability. MNEs negotiate low tax rates which in turn allows them to meet thresholds for tax exemptions in onshore jurisdictions. See also TRANSFER PRICE, MIXER COMPANY, MONEY LAUNDERING.

tax haven

a country that imposes low rates of personal and corporate TAXES, and as a consequence tends to attract wealthy individuals and MULTINATIONAL COMPANIES seeking to minimize their taxation liabilities. See MIXER COMPANY. See also TRANSFER PRICE.
References in periodicals archive ?
The Organisation for Economic Co-operation and Development (OECD), one of the organisations opposed to tax havens (another is the Tax Justice Network), defines various criteria for ranking territories among these countries.
Round-tripping is widely reported from Mauritius and some of the other tax havens, the source of India's majority of FDIs.
Shaxson would say that the culture and practices of tax havens warrants much stronger language than that.
Most see tax havens as states with systems enabling nonresidents to shirk tax obligations to other governments, along with bank secrecy.
The tax havens include New Zealand which is ranked as the least corrupt country, Singapore ranked number five and Switzerland number seven," Singh said.
Clearly, corrupt African elites could never have misappropriated the billions of dollars they have without the conduit tax havens that offer secrecy and myriad professional services such as off-the-shelf companies, dummy trusts, nominees, lawyers, accountants, name-plate offices and no real regulatory oversight.
TAP) -- A total of 82 deputies from the different parliamentary blocs presented a petition Saturday to the Speaker of the House of People's Representatives (HPR) for the creation of a parliamentary committee of inquiry on the classification of Tunisia by the European Union (EU) as a tax haven.
As Oxfam, an international nongovernmental organization (NGO), pointed out, the EU did not include some notorious tax havens such as the Cayman Islands, Bermuda and Jersey.
But in our view, South Korea's Special Economic Zones do not cause disproportionate flows of profits into the country," Johan Langerock, who co-authored Oxfam's report on tax havens, told DW.
On Tuesday, the EU published the list of 17 non-EU tax havens, including the UAE and Bahrain.
In the wake of the explosive Paradise Papers, Senator Sheldon Whitehouse (D-RI) and Congressman Lloyd Doggett (D-TX) called on Republicans to take up legislation to crack down on the use of offshore tax havens by corporations and the ultra-wealthy.