Tax Shelter and Tax Haven

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Tax Shelter
I. Definition
Any method of decreasing taxable income in a payments to tax collecting entities, including state and federal government. The most common type of tax shelter is an employer-sponsored 401(k)plan.

a. Types of tax shelters
Some tax shelters are questionable or even illegal:
Offshore companies. A company which is incorporated outside the jurisdiction of its primary operations regardless of whether that jurisdiction is an offshore financial centre. Due to differing tax rates and legislations in each country, tax benefits can be exploited. Example: If Import Co. buys $1 of goods from India and sells for $3, Import Co. will pay tax on $2 of taxable income. However, tax benefits can be exploited if Import Co. is
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A similar system is available in the United Kingdom and is known as the Individual Savings Account.
These tax shelters are usually created by the government to promote a certain desirable behavior, usually a long term investment, to help the economy; in turn, this generates even more tax revenue. Alternatively, the shelters may be a means to promote social behaviors. In Canada, in order to protect the Canadian culture from American influence, tax incentives were given to companies that produced Canadian television programs.
In general, a tax shelter is any organized program in which many individuals, rich or poor, participate to reduce their taxes due. However, a few individuals stretch the limits of legal interpretation of the income tax laws. While these actions may be within the boundary of legally accepted practice in physical form, these actions could be deemed to be conducted in bad faith. Tax shelters were intended to induce good behaviors from the masses, but at the same time caused a handful to act in the opposite manner. Tax shelters have therefore often shared an unsavory association with fraud.

Tax shelters are any method of reducing taxable income resulting in a reduction of the payments to tax collecting entities, including state and federal governments. The methodology can vary depending on local and international tax laws.
In North America, a tax shelter is generally defined as any method that recovers more than
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