Top World Tax Haven Lists
A tax haven is a place where certain taxes are levied at
a low rate or not at all. Among tax havens, different jurisdictions tend to be
havens for different types of taxes, and for different categories of people
and/or companies.
One way a person or company takes advantage of a tax haven is by moving to, and
becoming resident for tax purposes in, the tax haven (U.S. citizens see below).
Another way for an individual or a company to take advantage of a tax haven is
to establish a separate legal entity (an offshore company, trust or foundation),
subsidiary or holding company in the tax haven. Assets are transferred to the
new company or trust so that gains may be realized, or income earned, within
this legal entity rather than earned by the beneficial owner.
Most countries impose taxes which are based on source of income (if the money is
earned there it's subject to tax), or they tax based on residency (if you live
there then your worldwide income is subject to tax). But most countries do not
impose tax based on citizenship alone. The United States is unlike other
countries in that its citizens are subject to U.S. tax on their worldwide income
no matter where in the world they reside. U.S. citizens therefore find it
difficult to take advantage of personal tax havens. Although there are some
offshore bank accounts that have been advertised as tax havens, U.S. law
requires reporting of income from those accounts and failure to do so
constitutes tax evasion. Some nationals choose to give up their U.S. citizenship
rather than be restricted by the U.S. tax system.
However, U.S. citizens who reside (or spend long periods of time) outside the
U.S., may be able to exclude up to US$80,000 (or foreign equivalent) of salaried
income earned overseas (but not other types of income), as well as foreign
housing expenses. Additionally, the U.S. will normally allow a U.S. citizen to
subtract any foreign income taxes paid on foreign sourced income, from the U.S.
income tax due on that income. Also U.S. citizens do have the option of setting
up an offshore foundation or trust, which can be used as a tax reporting free
entity. However constraints exist on on how the income is used. For example,
foundations stipulate that funds must be used for altruistic purposes.
Examples of Tax Havens
The UK is a tax haven for people of foreign domicile, even if they are UK
resident (residence and domicile being separate legal concepts in the UK), in
that they pay no tax on foreign income not remitted to the UK. Similar
arrangements are to be found in a few other countries including Ireland.
In the Channel Islands, no tax is paid by corporations or individuals on foreign
income and gains. Non-residents are not taxed on local income. Local taxation is
at a fixed rate of 20.0% in Jersey, Guernsey, & Alderney and 0% in Sark.
the Isle of Man, does not have corporation tax and income tax from local sources
is 10% and 18% and non-local sources, 18%.
In Gibraltar, tax exempt companies, which must not trade or conduct any business
locally, are taxed at a flat rate of up to £300 a year.
Switzerland is a tax haven for foreigners who become resident after negotiating
the amount of their income subject to taxation with the canton in which they
intend to live. Typically taxable income is assumed to be five times the
accommodation rental paid.
Monaco does not levy a personal income tax and neither does Andorra.
The Bahamas levies neither personal income nor capital gains tax, nor are there
inheritance taxes.
Vanuatu, an island archipelago state in the Micronesian Pacific, is a tax haven
that does not release account information to other governments and law
enforcement agencies. In Vanuatu, there is no income tax, no withholding tax, no
capital gains tax, no inheritance taxes, and no exchange controls.
More Books about Tax Havens
Campione d'Italia
Hong Kong's tax rates are so low that it can be considered a tax haven.
Macau
Luxembourg
San Marino
Belize
Cayman Islands
Seychelles
Saudi Arabia
United Arab Emirates
Liechtenstein
Panama
Nevis
Some tax havens including some of the ones listed above do charge income tax as
well as other taxes such as capital gains, inheritance tax, and so forth.
Criteria distinguishing a taxpayer from a non-taxpayer can include citizenship
and residency and source of income. For example, in the Cayman Islands, one pays
no tax if one earns all one's revenue from outside the country but one does pay
tax if one earns income from within the country.
Amounts
While incomplete, and with the limitations discussed below, the available
statistics nonetheless indicate that offshore banking is a very sizeable
activity. IMF calculations based on BIS data suggest that for selected OFCs
(Offshore Financial Centers), on balance sheet OFC cross-border assets reached a
level of US$4.6 trillion at end-June 1999 (about 50 percent of total
cross-border assets), of which US$0.9 trillion in the Caribbean, US$1 trillion
in Asia, and most of the remaining US$2.7 trillion accounted for by the IFCs
(International Financial Centers), namely London, the U.S. IBFs, and the JOM
(Japanese Offshore Market
The source of this article is
Wikipedia, the free encyclopedia. The text of this
article is licensed under the
GFDL