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Tax Havens

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TAX HAVENS

DEFINING

Tax Havens

• Def 1:A tax haven is a country or territory where certain taxes are levied at a low rate or not at all. • Def 2: Tax haven or fiscal paradise are terms used to refer to a jurisdiction which enables its foreign residents or companies to reduce their tax liabilities from their homelands.

• Def 3: "What ... identifies an area as a tax haven is the existence of a composite tax structure established deliberately to take advantage of, and exploit, a worldwide demand for opportunities to engage in tax avoidance." (The Economist - description by Geoffrey Colin Powell )



Def 4: US Government Accountability Office was unable to find a satisfactory definition of a tax haven but regarded the …show more content…

Such companies, often called rotary, are used for providing services, purchase transactions or particular joint stock companies sales.

offshore company allows for income to accumulate in a low tax jurisdiction. and is used mainly by corporations and rich people from the world of art. • treaty shopping helps tax payers avoid barriers imposed on them by a double tax agreement, which aim is to prevent people from seeking tax benefits in third countries.

• Personal residency • Asset holding • Trading and other business activity • Financial intermediaries

DISADVANTAGES of Tax Havens
• Some people worry about the inaccessibility of their money as it is located in a far away offshore tax haven. However, in this day and technological age this is not an issue. With the advent of online banking, it is now possible and, indeed, expected in many offshore financial centres that their clients will conduct their transactions online.

• The main disadvantage for offshore companies located in tax havens is that many government and governmental agencies will not accept tenders from these types of offshore entities. These contracts would include defence, civil engineering, education, health authority and other such civil contracts.

EXAMPLES of tax havens
• The U.S. National Bureau of Economic Research has suggested that roughly 15% of countries in the world are tax havens, that these countries tend to be small and affluent, and that better

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