Tax Havens

TAX HAVENS DEFINING task Havens Def 1A valueation haven is a region or territory where certain revenuees are levied at a depleted rate or not at all. Def 2 value haven or fiscal paradise are terms use to refer to a jurisdiction which enables its orthogonal 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 by design to take advant advance of, and exploit, a worldwide demand for opportunities to engage in tax avoidance. (The Economist commentary by Geoffrey Colin Powell ) Def 4 US Government Accountability Office was unable to find a all right definition of a tax haven but regarded the following characteristics as indicative of a tax haven 1) nil or nominal taxes 2) lack of rough-and-ready exchange of tax information with foreign tax authorities 3) lack of transparency in the operation of legislative, legal or administrative provisions 4) no requirement for a substantive local presence 5) self-promotion as an offshore financial center. TYPES of Tax Havens ) Universal Tax Haven is a countrys put up to entrepreneurs and investors with a wide range of financial and tax benefits. Such havens include colonial territories and also mini countries. In order to attract both entrepreneurs and investors they offer attractive political, economic, fiscal and judicial arrangements. 2) Special Tax Haven allows for special types of activities. A subject of such an orientation a situation may be created in which high taxes exist concurrently with the low fiscal rate for feature economic branches or tax payers.BENEFITS and ADVANTAGES of tax havens profit transfer is a term apply to describe profits achieved from selling goods and services at cost. As a result profits are higher in the country where corporation tax is lower. rotary company is a company which tush be bought or set up in one of the tax havens. adaptation proced ure is simple the companys owner does not have to reveal his personal data and therefore can use fictional names. 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 obligate 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 opposite business employment Financial intermediaries DISADVANTAGES of Tax Havens Some people worry about the inaccessibility of their money as it is laid 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 politics 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 governed and regulated countries are more than likely to become tax havens, and are more likely to be successful if they become tax havens. The following are designated as offshore financial centres by the IMF(International Monetary Fund ) or the FSF (Financial stability Forum)Andorra Anguilla Antigua Aruba Bahamas Bahrain Barbados Belize Bermuda British Virgin Islands Cayman Islands Cook Islands Costa Rica Cyprus Djibo uti Dominica Ghana Grenada Guernsey Hong Kong islet of Man Israel Japan Jersey Labuan, Malaysia Lebanon Liechtenstein London Luxembourg Macau Malta Marianas Marshall Islands Mauritius Micronesia Montserrat Nauru Netherlands Antilles New Zealand Niue Palau waterman Philippines Puerto Rico Samoa Seychelles Singapore St Kitts and Nevis St Lucia St Vincent and the Grenadines Switzerland Tahiti Tangier Thailand Turks and Caicos United States (particularly, Delaware, but some other states have offshore characteristics) Uruguay Vanuatu OECD and Tax Havens List of Uncooperative Tax Havens In a report issued in 2000, the OECD (Organisation for Economic Co-operation and Development ) place a number of jurisdictions as tax havens according to criteria it had established. Between 2000 and April 2002, 31 jurisdictions made formal commitments to employ the OECDs standards of transparency and exchange of information. Seven jurisdictions (Andorra, The Principality of Liechtenstein, Liberia, The Principality of Monaco, The land of the Marshall Islands, The Republic of Nauru and The Republic of Vanuatu) did not make commitments to transparency and exchange of information at that time and were identified in April 2002 by the OECDs Committee on Fiscal Affairs as unhelpful tax havens. All of these jurisdictions subsequently made commitments and were removed from the list of uncooperative tax havens. Nauru and Vanuatu made their commitments in 2003 and Liberia and the Marshall Islands in 2007. In May 2009, the Committee on Fiscal Affairs decided to remove all three remain jurisdictions (Andorra, the Principality of Liechtenstein and the Principality of Monaco) from the list of uncooperative tax havens in the light of their commitments to implement the OECD standards of transparency and effective exchange of information and the timetable they set for the implementation. As a result, no jurisdiction is currently listed as an unco operative tax haven by the Committee on Fiscal Affairs. THE END THANK YOU FOR YOUR ATTENTION