Tax Haven
TAX HAVEN
Index
Definition and characteristics of Tax Haven Page 2
Tax Haven Criteria Page 5
Particularities of some tax havens Page 7
Evolution of the Spanish Tax Law Page 11
1. Definition and characteristics of Tax Haven
Probably most people have heart about tax havens, but maybe there are confusions about the exact meaning of this concept. So on, we consider important to define a tax haven in order to have a clear idea.
What identifies an area as a tax haven is the existence of a composite tax structure established deliberately to take advantage of, and exploit, a worldwide demand for opportunities to engage in tax avoidance. It’s also suggested that any country which modifies its tax laws to attract foreign capital could be considered a tax haven as well. According to other definitions, the central feature of a haven is that its laws and other measures can be used to evade or avoid the tax laws or regulations of other jurisdictions. Another definition of tax haven is a country or territory where certain taxes are levied at a low rate or not at all. On this sense, individuals or corporate entities can find it attractive to move themselves to areas with reduced or nil taxation levels. On consequence, this creates a situation of tax competition among governments.
Now it seems we can have a clearly idea of what a tax haven is, but in US, particularly the Government Accountability Office was unable to find a satisfactory definition of a tax haven in 2008, but regarded the following characteristics as indicative of a tax haven: 1. nil or nominal taxes; 2. lack of effective 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; and 5. self-promotion as an offshore financial centre.
Difference with Offshore Financial Centers
The last point of the US Government Accountability
Index
Definition and characteristics of Tax Haven Page 2
Tax Haven Criteria Page 5
Particularities of some tax havens Page 7
Evolution of the Spanish Tax Law Page 11
1. Definition and characteristics of Tax Haven
Probably most people have heart about tax havens, but maybe there are confusions about the exact meaning of this concept. So on, we consider important to define a tax haven in order to have a clear idea.
What identifies an area as a tax haven is the existence of a composite tax structure established deliberately to take advantage of, and exploit, a worldwide demand for opportunities to engage in tax avoidance. It’s also suggested that any country which modifies its tax laws to attract foreign capital could be considered a tax haven as well. According to other definitions, the central feature of a haven is that its laws and other measures can be used to evade or avoid the tax laws or regulations of other jurisdictions. Another definition of tax haven is a country or territory where certain taxes are levied at a low rate or not at all. On this sense, individuals or corporate entities can find it attractive to move themselves to areas with reduced or nil taxation levels. On consequence, this creates a situation of tax competition among governments.
Now it seems we can have a clearly idea of what a tax haven is, but in US, particularly the Government Accountability Office was unable to find a satisfactory definition of a tax haven in 2008, but regarded the following characteristics as indicative of a tax haven: 1. nil or nominal taxes; 2. lack of effective 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; and 5. self-promotion as an offshore financial centre.
Difference with Offshore Financial Centers
The last point of the US Government Accountability