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 ?
On the other hand, the "captive" banks in the tax heavens are often aware of their own complicity.
The workshop will conclude with a separate session on tax heavens at Crowe Horwath Dubai.
How come we can leave this highly leveraged market to operate in a highly unregulated manner in tax heavens and unregistered, unregulated trade areas?
The bank's chief executive officer, Baudouin Prot, said, 'We have decided to close our filiations in tax heavens, those countries which remained in the grey list of the Organization for Economics Co-operation and Development (OECD).
com, recently launched an interactive map titled "Retiree Tax Heavens (and Hells)" that indicates the most and least retirement tax-friendly states.
The current neoliberal market-led model has created an economy for the privileged ones because of increasing return to the capitalist class, shareholders of big corporations and their global network of tax heavens.
Advani urged the government to make public all the 700 names believed to have put their illicit money in tax heavens, and the measures taken to bring it back.
A finance ministry official said India has started renegotiating its tax agreements with several countries to track ill- gotten money stashed in tax heavens.
In recent years, we has begun criticising them, and we have singled out very rich individuals who make use of the tax heavens in Panama, Cyprus, Jersey and a myriad of other locations they are many and it has been within the business culture of the very rich worldwide to use them when in their interest; they have not wanted to see much ethically wrong about it.