The Best Tax Haven and A List of Tax Havens of the World
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
A list of Tax Havens:
ANDORRA, ANGUILLA, ANTIGUA, ANTILLES, ARUBA,
AUSTRALIA, BAHAMAS, BAHRAIN, BARBADOS, BELIZE,
BERMUDA, BVI, CANARY ISLES, CANADA, CAYMAN,
COOK ISLES, COSTA RICA, CYPRUS, DOMINICA, GIBRALTAR,
GREECE, GUERNSEY, IRELAND, ISLE OF MAN, JERSEY,
LATVIA, LIECHTENSTEIN, MALTA, MAURITIUS, MONACO,
PANAMA, SWITZERLAND, THAILAND, TURKS-CAICOS, UAE,
UK, USA, VANUATU, W SOMOA
List of Organization for Economic
Co-operation and Development (OECD) Unco-operative Tax Havens
33 Jurisdictions have made commitments to transparency and effective
exchange of information and are considered co-operative jurisdictions by the
OECD's Committee on Fiscal Affairs.
Although a small number of jurisdictions identified as tax havens in June
2000 have not yet made commitments, the OECD would welcome continued
dialogue with these jurisdictions and the prospect of their future
commitment to transparency and effective exchange of information.
The following jurisdictions, which have not yet made commitments to
transparency and effective exchange of information, have been identified by
the OECD's Committee on Fiscal Affairs as unco-operative tax havens.
The Principality of Liechtenstein
The Republic of the Marshall Islands
The Principality of Monaco
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 (USA citizens see
below). Another way for an individual or a company to take advantage of a
tax haven is to establish a separate or subsidiary legal entity (a company
or a common law trust) in the tax haven. Assets are transferred to the new
company or trust so that gains may be realized, or income earned, which
otherwise would be realized or earned by the beneficial owner.
Whether all this is tax avoidance or tax evasion is not always entirely
clear and depends upon the legislation of the countries involved and the
particular circumstances of the companies or individuals.
Many countries (particularly OECD countries) have laws that make it
difficult for their residents to own a company (or have an investment) in a
tax haven without paying tax either in the tax haven or where they are
resident. For example, income or gains arising to the offshore company or
investment may attributed for tax purposes to the owner or investor under
CFC or other laws. Although many countries also have bilateral double
taxation treaties to prevent their residents from paying tax twice
(although, typically, the higher rate of tax charged in the two countries is
due), few countries have tax treaties with tax havens.
Most countries tax all their residents (not only citizens) on their
worldwide income and their citizens escape tax if they are not resident in
the country. The United States is unlike other countries in that its
citizens pay US tax on their income no matter in which country they are
resident. US 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.
However: US citizens may exclude up to US$80,000 of income earned overseas
as well as housing expenses if they physically reside overseas.
Examples of Tax Havens and Tax Havens of the World
* 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.
* 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
* In the various Channel Islands, and in the Isle of Man, 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 Gibraltar, tax exempt companies, which must not trade or conduct any
business locally, are taxed at a flat rate of £100 a year.
* 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.
Vanuatu reputedly has become a mechanism for international transfers of cash
in CIA operations. Vanuatu related businesses and bank accounts surfaced in
the relations to 2004 Presidential vote fraud in the United States,
according to investigative journalist Wayne Marsden.
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