Tax Havens

TAX HAVENS specify Tax seaports Def 1A taxation income seaport is a field or territory where certain taxes atomic number 18 levied at a showtime rate or not at all. Def 2 Tax haven or fiscal paradise are terms apply to call forth 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 reinforcement of, and exploit, a humanitywide demand for opportunities to engage in tax avoidance. (The economist description by Geoffrey Colin Powell ) Def 4 US Government Accountability use was unable to find a satisfactory definition of a tax haven but regarded the fol humbleding characteristics as indicative of a tax haven 1) nil or nominal taxes 2) lack of effective deputize of tax information with foreign tax authorities 3) lack of enhancer in the operation of legislative, legal or administra tive provisions 4) no requirement for a substantive local presence 5) self-promotion as an shoreward financial center. TYPES of Tax Havens ) Universal Tax Haven is a countrys hold out to entrepreneurs and investors with a wide range of financial and tax benefits. Such havens admit colonial territories and also mini countries. In order to attract both(prenominal) entrepreneurs and investors they offer attractive political, economic, fiscal and judicial arrangements. 2) Special Tax Haven allows for special types of activities. A result of such an orientation a positioning may be created in which high taxes exist con currently with the low fiscal rate for particular economic branches or tax payers.BENEFITS and ADVANTAGES of tax havens profit transfer is a term use to describe wage achieved from selling goods and services at cost. As a result wampum are higher in the country where corporation tax is lower. roofy company is a company which can be bought or scar up in one of th e tax havens. Registration procedure is childlike the companys owner does not have to reveal his personal data and so can use fictional names. Such companies, often called rotary, are used for providing services, purchase transactions or particular joint stock companies sales. onshore company allows for income to accumulate in a low tax jurisdiction. and is used brinyly by corporations and rich people from the world of art. treaty shop helps tax payers avoid barriers imposed on them by a figure tax agreement, which aim is to prevent people from seeking tax benefits in third countries. Personal residency Asset holding Trading and former(a) business activity Financial intermediaries DISADVANTAGES of Tax Havens Some people chafe about the inaccessibility of their money as it is located in a far away offshore tax haven.However, in this day and expert age this is not an issue. With the advent of online banking, it is now possible and, indeed, expected in many offshore financi al centres that their clients will conduct their transactions online. The main disadvantage for offshore companies located in tax havens is that many political relation and governmental agencies will not accept tenders from these types of offshore entities. These contracts would include defence, elegant engineering, education, health authority and former(a) such civil contracts.EXAMPLES of tax havens The U. S. field of study 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 correct 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 Islan ds Cook Islands costa Rica Cyprus Djibouti Dominica Ghana Grenada Guernsey Hong Kong Isle 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 straw hat 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 ) identified a number of jurisdictions as tax havens according to criteria it had established. Between 2000 and April 2002, 31 jurisdictions determine formal commitments to implement the OECDs standards of transparency and st ep in of information. Seven jurisdictions (Andorra, The principality of Liechtenstein, Liberia, The Principality of Monaco, The Republic 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 disobliging tax havens. All of these jurisdictions subsequently made commitments and were excerptd from the mention 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 remaining 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 implemen tation. As a result, no jurisdiction is currently listed as an uncooperative tax haven by the Committee on Fiscal Affairs. THE END THANK YOU FOR YOUR ATTENTION