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 ?
Additionally, even if authorities have a suspicion regarding a particular transaction or individual, there are strict requirements for when the tax haven is allowed to release information, essentially rendering the burden of proof on tax authorities very high.
It also criticized the EU for not following international standards in its screening of the tax havens.
I don't think South Korea is the big tax haven we are all looking for," he added.
Asked if the Queen should apologise for the offshore investments revealed in the papers, Mr Corbyn told the CBI's annual conference in London: "Well, anyone that is putting money into tax havens in order to avoid taxation in Britain, and obviously investigations have to take place, should do two things - not just apologise for it but also recognise what it does to our society.
There is substantial variation across nations in the share of their citizens' wealth that is held in tax havens.
jurisdiction would have the right and power to tax that same income, taxpayers should consider whether the state's tax haven legislation runs afoul of the U.
Thus, tax authorities worldwide must try to share information necessary for taxation in each country in order to deal with the tax haven issue.
In France, a parliamentary fact-finding mission has estimated that the shifting of assets to tax havens by holders of capital costs the Treasury 60 to 80 billion euros annually.
Tax justice and the struggle against tax havens have to be at center stage of policy agenda focusing on inequalities.
That explosion inevitably raises perceptions that New Zealand is being used a tax haven, and that is not good for our international reputation," Dunne said in a statement.
Another 11 states considered, but did not pass, tax haven legislation in 2015, and at least 10 have done so this year.
Ownership of thousands of acres of Scotland is hidden offshore in tax haven Panama, we reveal today.