What is Tax haven?
A tax haven is a jurisdiction where particular taxes, such as an inheritance tax or income tax, are levied at a low rate or not at all. It may also refer to a state, country, or territory which maintains a system of financial secrecy, which enables foreign individuals to hide assets or income to avoid or reduce taxes in the home jurisdiction.
Earnings from income generated from real estate (i.e. by renting property owned in an offshore jurisdiction) can also be eliminated in this way. If taxes (if any) are paid in the tax haven jurisdiction, companies can avoid taxes in their home jurisdiction because the tax had already been paid in the lower tax rate jurisdiction.
[News]US, Not Panama, in Top 10 Tax Havens for Evaders
The United States is among the top 10 countries with the least financial transparency, making it a perfect tax haven for those unsavory characters looking to launder and hide their ill-gotten cash.
The recent huge leak of documents from the Panamanian law firm Mossack Fonseca has revealed how tax havens are used to hide wealth and has focused the world's attention on the Central American nation.
Important: Can you afford to Retire? The top 10 nations for financial secrecy according to The Tax Justice Network:
Switzerland
Hong Kong
USA
Singapore
The Cayman Islands
Luxembourg
Lebanon
Germany
Bahrain
United Arab Emirates
Read more: BBC: US, Not Panama, a Top 10 Tax Haven
Individuals or corporate entities may establish shell subsidiaries or move themselves to areas with reduced or no taxation levels relative to typical international taxation. This creates a situation of tax competition among jurisdictions. Different jurisdictions may be havens for different types of taxes, and for different categories of people or companies.[3] Sovereign jurisdictions or self-governing territories under international law have the power to enact tax laws affecting their territories, unless limited by previous international treaties.
[Video] Tax Havens 101: the High Cost of Going Offshore
What are offshore tax havens?
Who uses them?
How do they work?
Let's find out in this video!
A General information of Tax Heaven has been shown in the article. However, when we are talking about social justice, may be there should be some information on how the wealth is hidden unjustly provided. And there are some places like Hong Kong do not charge tax for foreign wealth and income. How is it unjust to hide wealth in tax heaven. etc....
回覆刪除Tax havens help hide all the secret money from the large enterprises. This issue seem being so far away from us. Since they are legal according to laws, it is definitely an intractable worldwide problem. From Friedman's theory, the way of the preventing taxation is a way of guaranteeing their business profit. I can not agree to his point of view. People work in business companies also can enact their social conscience in it. Reputation of the companies is also important for long term development. I believe once some of the companies being discovered their action of hiding their capital to the tax havens, they would suffer in a certain extend of lose.
回覆刪除This article has talked about the Tax Haven and several reasons for a nation to become a tax haven. Is Tax Haven really good for the companies or stakeholders? As we know, the companies pay no or minimal taxes in Tax Haven. However, the other cost operate in a tax haven are significantly higher because government still need to gain money for the daily operations. I think you can also include the advantages and disadvantages of different stakeholders of Tax Haven. It will be more comprehensive.
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回覆刪除It is difficult to say whether you are tax evasion or not in this case. The reasons why a nation want to become a tax Haven were clearly told in this article. Apart from the advantages, it is untraceable that if someone make use of this to do some illegal activities.Besides, it may be unfair because large firm have the ability to set up offshore company in order to avoid tax, but those small firm need to pay the tax.
回覆刪除From the point of view of those multi-national company, tax havens are good places for them to increase their net profit. And based on the picture you posted, those tax havens tend to be some small and less developed countries, lower tax rate can attract some foreign capital in order to develop local infrastructure. But it may also create the problem of money laundering.
回覆刪除This article is about tax haven. Tax haven may benefit developing country as it attracts MNC to invest in their country. However, it is unfair for other developed country as it contains tax evasion. Therefore, it is difficult for us to evaluate tax haven is good or bad.
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