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 ?
What tax haven countries can Americans move to and get citizenship?
The Corporate Tax Haven Index (CTHI) by Tax Justice Network which studied nine African nations, says weak tax systems experienced in Botswana, Gambia, Ghana, Kenya, Liberia, Mauritius, Seychelles, South Africa and Tanzania are to blame
But if we allow the executive branch to have an unlimited exercise of its arrogated power, we can become a nation pockmarked with thousands of tax havens consisting of shopping centers, beach resorts, hospitals and other businesses.
As per the agreed list, the tax haven countries which apparently did not show willingness to share information with Pakistan are Anguilla, Bahamas, Barbados, Bermuda, British Virgin Islands, Cayman Islands, Hong Kong, Mauritius, Niue, Panama and Samoa.
Do tax havens exist because we lack the capacity and information to deal with them, or are they actually a consequence of global political power relations?
Tax havens are defined as places where the tax burden is minimal or nonexistent.
Some well-known tax havens include the Bahamas, Belize, the British Virgin Islands, the Cayman Islands, Monaco, the Isle of Man, Mauritius and the Channel Islands.
The EU has listed Tunisia in the blacklist of 17 countries outside the EU classified as tax havens, adopted by 28 European finance ministers, at a meeting held last Tuesday in Brussels.
The European Union's first-ever blacklist of 17 tax havens is seen as its efforts to crack down on international tax avoidance and evasion.
This was done in order to put pressure on the EU to not unduly shorten its list of tax havens for political reasons.
On Tuesday, the EU published the list of 17 non-EU tax havens, including the UAE and Bahrain.
European Union finance ministers called on Tuesday for a blacklist of tax havens to be drawn up for approval next month as part of kick back against what it sees as tax dodging by the rich and famous.