TAX HAVENS

TOPIC: Economy

Context- ‘Himalayan yogi’ planned vacation to Seychelles, shared songs with NSE chief, email exchange reveals.

Concept-

About Tax Havens:

A tax haven is a jurisdiction with very low “effective” rates of taxation for foreign investors.
In some traditional definitions, a tax haven also offers financial secrecy.
- However, while countries with high levels of secrecy but also high rates of taxation, most notably the United States and Germany in the Financial Secrecy Index (“FSI”) rankings, can be featured in some tax haven lists, they are not universally considered as tax havens.
A list of some of the most popular tax haven countries includes: Andorra, the Bahamas, Belize, Bermuda, the British Virgin Islands, the Cayman Islands, the Channel Islands, the Cook Islands, The Island of Jersey, Hong Kong, The Isle of Man, Mauritius, Lichtenstein, Monaco, Panama, St. Kitts, and Nevis.
Some notable authors on tax havens describe them as “captured states”. The term is particularly used for smaller tax havens, with examples being Antigua, the Seychelles, and Jersey.
Worldwide there is not a comprehensively defined standard for the classification of a tax haven country. However, there are several regulatory bodies that monitor tax haven countries, including the Organization of Economic Cooperation and Development (OECD) and the U.S. Government Accountability Office.
Characteristics of tax haven countries generally include:
- no or low income taxes,
- minimal reporting of information,
- lack of transparency obligations,
- lack of local presence requirements, and
- marketing of tax haven vehicles.