Tuesday 6 May 2014

Tax heaven

What is a tax heaven?

Tax heaven is usually referred to as an offshore country or corporation. That offers some to all tax exemption. Each year there are more laws set in place in order to disallow the use of tax heavens, but there are may loopholes still available. Also most countries where the tax heaven are created usually provide little to no information to foreign tax authorities.

Most popular tax heavens:

  • Switzerland
  • Luxembourg
  • Ireland
  • Netherlands
  • Isle of Man
  • British Overseas Territory:
    • Bermuda
    • British Virgin Islands
    • Cayman Islands
  • United States:
    • Delaware
    • Puerto Rico

Advantages of a tax heaven

The usual three advantages by witch most countries are even considered tax heavens are:
Nominal to zero taxes. Offering non resident countries some to all tax exemption.
Protection of personal information. Having laws in place that disallow the disclosure of most of the tax related information to foreign tax authorities.
Limited regulation of the company as a lack of transparency.

The future

The future for the tax heavens may not seem so bright, but right now they are still used world wide. Estimated that each year tax heavens shelter may trillions of dollars from tax.

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