Tax Haven
Tax havens refer to those that are used to attract foreign
capital inflows, prosper the economy of the country or the region, determine a
certain range in the country or region, and allow foreigners to invest and
engage in various economic, trade and service activities, gain income or own
property here. Countries and regions that do not levy direct taxes, or
implement low direct tax rates, or implement special tax incentives.
The purpose of attracting foreign capital inflow is to explain that the tax rate is very low or the area is completely exempt from tax. Representing the Cayman Islands, the British Virgin Islands, etc.
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Table of Contents |
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1. Word Source 2. Basic Information 3. Major Countries ▪ British Virgin
Islands ▪ British Jersey ▪ Monaco, Liechtenstein, Andorra ▪ Bermuda ▪ Nauru ▪ Panama ▪ Luxembourg China's response ▪ Mainland China ▪ Macau, China ▪ Hong Kong, China 4. Greylist 5. Good times gone 6. Tax Havens Become History |
What is Source of the Word Tax Haven?
Tax haven, that is, "tax haven", the word tax haven comes from the English Tax haven, haven is interpreted as a port or a refuge. Some media mistook haven for heaven, and thus mistranslated it as "tax haven".
What is the Basic Information on Tax Haven ?
A tax haven is a country or region with very low tax rates or even complete tax exemption, but there may be only individual lower taxes that apply to certain categories of individuals or businesses.
One of the ways in which individuals can benefit from tax havens is by migrating to the area so that legally they only have to pay taxes to the duty-free government.
In addition, individuals or commercial organizations can also establish subsidiaries or independent legal entities (i.e. companies or funds in the common law legal system) in tax havens.
After the assets are moved to the new company, they can cash in profits, so that the payment is lower or exempt from tax. However, it is difficult to generalize whether using this method is tax avoidance or tax evasion. This depends on the individual circumstances of the relevant country or region, as well as the relevant individual or institution.
Tax havens are mostly smaller coastal and landlocked countries, or even tiny islands or "enclaves". They have scarce natural resources, small populations and weak economic bases. But because it has some "superiorities", it has attracted a large number of foreign companies to register here.
In addition to Liechtenstein, there are also small
European countries or regions such as Andorra, Monaco, Channel Islands, and
Isle of Man, as well as the Cayman Islands, Bermuda, Bahamas, Netherlands
Antilles, British Virgin Islands, and other Caribbean regions are tax evasion
Heaven.
The main features of tax havens include opaque financial information and taxation systems, extremely low tax rates or even no taxation, facilitating tax avoidance and money laundering for enterprises, organizations and individuals in other countries and regions, and damaging the stability of the international financial system.
At the G20 London financial summit in 2009,
leaders agreed to take action against tax havens that refuse to cooperate, and
prepared to impose sanctions.
Memorabilia
In April 2009, the G20 London summit called for action to
combat international tax evasion.
In May 2010, the OECD revised the 1988 Multilateral
Convention on Mutual Assistance in the Administration of Taxation.
On June 1, 2011, the Multilateral Convention on Mutual
Assistance in the Administration of Taxation, as amended by the Protocol,
entered into force.
In July 2013, the G20 Finance Ministers and Central Bank
Governors Meeting supported the automatic exchange of tax information within
the framework of the Multilateral Convention on Mutual Tax Administration as a
new standard for global tax information exchange.
On September 6, 2013, the leaders of the G20 countries
adopted the "G20 St. Petersburg Summit Leaders' Declaration" in St.
Petersburg, Russia, agreeing to implement new standards for the exchange of
international tax information before the end of 2015.
Since July 1, 2017, China has also officially implemented the "Chinese version of CRS" - "Administrative Measures for Due Diligence of Non-resident Financial Account Tax-related Information".
In
2018, information will be exchanged with other countries (regions).
On December 5, 2017, the European Union announced a blacklist
of tax havens, namely Eastern Samoa, Bahrain, Barbados, Grenada, Guam, South
Korea, Macau, China, Marshall Islands, Mongolia, Namibia, Palau, Panama, St.
Lou West Asia, Samoa, Trinidad and Tobago, Tunisia and the United Arab
Emirates.
Major Tax Haven Countries
Tax Haven of The British Virgin Islands
Of all the tax havens in the world that can freely register companies, the British Virgin Islands has the lowest registration requirements and the least regulation. There, to set up a company with a registered capital of less than 50,000 US dollars, the minimum registration fee is only 300 US dollars, plus the license fee and handling fee.
The local government charges a
total of 980 US dollars, and then only needs to pay a business license renewal
fee of 600 US dollars every year.
Monaco, Liechtenstein and Andorra
Among the global tax havens, only Monaco, Liechtenstein and
Andorra are still making slow progress in information exchange and are listed
as non-cooperative tax havens by the OECD.
British Jersey
Because of its loose legal system, it has attracted many
European financial institutions. Its Channel Islands shelter 225 banks and 820
investment funds.
Bermuda
Bermuda is regarded as one of the best places to handle
insurance and reinsurance business. 16 of the world's top 35 insurance
companies are located here. The island is also considered one of the best
places to manage family businesses.
Nauru
Nauru implements bank secrecy system, exchange activities are not regulated, and management is loose.
You can open a local bank for as little
as $25,000.
Panama
With hundreds of banks and thousands of registered companies Panama is located in Central America. Here, a company can be registered quickly. There are many preferential legal measures which can relieve business owners from worrying about their behavior not complying with international regulations.
Luxembourg
Data show that Luxembourg has a population of only 500,000, but the total size of banking assets is 23 times its GDP, much higher than Cyprus's 8 times.
For Luxembourg, once its financial industry has serious
problems, it has no effective way to solve it. The international community has
been criticizing tax havens for a long time, but the offshore financial
industry in various tax havens is still very bright.
Chinese Reaction
In April 2009, at the G20 meeting, cracking down on tax havens became one of the concerns of the participating countries.
At the
meeting, it was proposed to include Hong Kong and Macau on the list of tax
havens. classified as a tax haven.
India Reaction
Tax Havens Inside China
On the afternoon of April 2, 2009, Foreign Ministry
Spokesperson Qin Gang presided over a regular press conference. When a reporter
asked a question, he quoted French President Nicolas Sarkozy as saying,
"China may oppose the summit's proposal to avoid tax due to factors in
Hong Kong and Macau. Heaven's blacklist."
Qin Gang (original): I have not seen the remarks made by French President Sarkozy that you mentioned. But I can tell you responsibly that China is a responsible country.
Since the beginning of the international financial crisis, China has advocated that the international community should strengthen cooperation and help each other in coping with and overcoming the current international financial crisis. China says so and does it.
China actively participated in the discussions of the international community on dealing with the international financial crisis, reforming the international financial and monetary system, and strengthening financial supervision, and played a constructive role.
China cannot agree with the statement "China is the obstacle".
China is not an obstacle, but a constructive collaborator and active enabler. China has stated its position and proposition many times.
On the issue of "tax havens", China actively supports the joint efforts of the international community to strengthen financial supervision, combat tax evasion, and support international cooperation in anti-tax avoidance.
Listing China's Hong Kong and Macau Special Administrative Regions as 'tax havens' is groundless and we firmly oppose it.
Macao, China
On April 3, 2009, Macau Secretary for Economy and Finance Tam
Pak Yuen emphasized that Macau has never been a tax haven, and any remarks that
Macau is a tax haven are groundless.
Tan Boyuan thanked the central government for explaining
Macau's actual tax situation to the participating countries at the "Second
Financial Summit of G20 Leaders", thus making Macau excluded from the
relevant list.
He said that the Ministry of Finance and the Ministry of
Foreign Affairs of China have fully grasped and understood the tax system in
Macau, as well as the laws and regulations on improving taxation.
Hong Kong, China
The Chief Executive of the Hong Kong Special Administrative Region, Donald Tsang, said that Hong Kong's tax system is very simple and has a good banking system.
To ensure that policies fully comply with international regulations, relevant laws will be improved to eliminate doubts from the outside world.
Financial officials of the SAR met with the media on the same day, pointing out that Hong Kong supports the tax transparency arrangement initiated by the "Organization for Economic Co-operation and Development".
In order to comply with international tax standards, Hong Kong will revise
relevant regulations and submit them to the Legislative Council for
deliberation within this year. The SAR hopes to sign double taxation avoidance
agreements with many countries to facilitate the development of corporate
trade.
Tax Haven Greylist
On April 2, 2009, the OECD released an assessment report that included Costa Rica, Malaysia, the Philippines and Uruguay on the blacklist of refusal to comply with international tax standards (a few days later, due to these countries' commitment to comply with international tax standards promoted to the grey list).
38 countries and regions including Switzerland, Luxembourg
and Guatemala were included in the grey list, that is, these countries and
regions committed to abide by international tax standards and made efforts in
bank secrecy and tax information exchange, but has not yet been implemented.
In addition, the OECD has also whitelisted 40 countries and regions, that is,
substantially fulfilling international common tax standards. Switzerland has
become the 56th member on the "white list" as countries and regions
meet the OECD criteria one after another.
The latest list released by the Paris-based Organization for Economic Cooperation and Development (OECD) on the 25th shows that Switzerland has been successfully promoted from the "tax haven" gray list to the white list, that is, it has become a country that has substantially fulfilled international taxation standards.
Switzerland and Qatar signed a bilateral tax exchange agreement on September 24, 2009, the 12th such agreement signed by Switzerland in recent times.
According to OECD regulations, if a country or
region has signed 12 bilateral tax exchange agreements with other countries or
regions, it is considered to be a country that has substantially fulfilled
international taxation standards.
No Longer
According to the Bank Secrecy Act passed by the Swiss Parliament in 1934, banks should prevent customer information from being known to third parties, whether private or official, Swiss banks have thus won the trust of customers around the world and attracted a large inflow of funds.
It
is understood that Swiss banks manage 1/4 to 1/3 of the world's private wealth.
But at the same time, many people use this law to exploit loopholes, or to
evade taxes, or even transfer and hide illegal assets.
The unpleasant name "tax haven" has also been
detained by Switzerland. With the advent of the financial crisis, the global
economy has fallen into recession, and some financially strapped western powers
have begun to exert strong pressure on Switzerland, not only asking for the
information of anonymous depositors in their own country, but also requesting
it to withhold the debts of the past years and the future. tax payment. In
fact, as early as 2010, Switzerland was forced to make concessions, agreeing to
provide customer information to the US government, and the Bank Secrecy Act,
once considered "unbreakable", began to loosen.
Many analysts believe that the guilty plea and forced closure
of Weglin Bank in the United States is likely to trigger more national
governments to make information disclosure requirements on Swiss banks. This
will further jeopardize the Swiss banking industry, weaken the status of
Switzerland's offshore financial center, and even affect the entire Swiss
economy.
Tax havens may become history. 136 countries around the world
reach an international tax reform agreement
On the 8th local time, the Organization for Economic
Cooperation and Development, headquartered in Paris, France, announced that 136
countries and regions have agreed to reform the international tax system, and
will impose a corporate tax of at least 15% on large multinational companies
from 2023.
The OECD estimates that after the implementation of the plan, more than $125 billion in profits from about 100 large multinational companies around the world will be redistributed to countries. Companies in the Cayman Islands are Shaken.
Can Tax Havens become History?
Speaking of the Cayman Islands, the Virgin Islands, Bermuda and other places, the word "tax haven" is easy to think of. In fact, these places save huge profits for the world's richest people and corporations at very low tax rates.
More than a decade ago, the world's criticism of tax havens was limited to moral condemnation, because it was impossible to assess how much impact they would have on the macro economy.
Over the years, tax havens have caused countries to lose hundreds of billions of dollars in corporate income tax each year. have to pay attention.
With the announcement of the Organization for Economic Cooperation and Development in Paris, France 136 countries and regions have agreed to reform the international tax system, and will impose a corporate tax of at least 15% on large multinational companies from 2023.
This may be the most profound reform of the international tax
system in the past 100 years, trying to solve the problem of the continuous
loss of tax sources in various countries once and for all - by redistributing
the right to collect tax, and eradicating the soil that breeds tax evasion. If
all countries adopt a minimum tax rate of 15%, tax havens will naturally lose
their meaning.
The Caribbean island country, which was at risk of being destroyed by a hurricane, is known as a tax haven, and its per capita GDP exceeds China's
For most countries, in order to maintain sustainable and
healthy economic and social development, in addition to a reasonable population
size and abundant resources, a good ecological environment is equally
important. If the ecological environment is bad, especially if it is frequently
attacked by earthquakes, hurricanes, and tsunamis, it is likely to fall into
development difficulties, and even survival will become a big problem. However,
not all countries cannot break this "magic", such as the Caribbean
island country Antigua and Barbuda (hereinafter referred to as
"Anba"), which is often hit by hurricanes, is a typical example.
Amba is located in the southeast of the Caribbean Sea and the northern part of the Lesser Antilles. It consists of three islands, Antigua, Barbuda and Redonda. It covers an area of only 444.6 square kilometers and has a total population of about 104,000. Its capital is St. John's.
Beginning in 1520, Amba was conquered by Spain and France successively, captured by Britain in 1632, and officially reduced to its colony in 1667, until it won its independence on November 1, 1981.
After independence, Antigua and Barbuda chose
to join the British Commonwealth and continued to support the British King as
the head of state.
Antigua and Barbuda Economy
In all fairness, the living environment of Anba is not good. In addition to the small population and frequent disasters, the natural resources in the territory are very scarce. There are only a small amount of limestone, clay, construction stones and barite, which are of little development and utilization value. All energy is imported. At the same time, there are many hills and mountains in Antigua and Barbuda, and only some narrow and long silt plains are scattered in the central area.
The arable land is
seriously insufficient and the soil is relatively poor. Only a small amount of
crops such as corn, vegetables, fruits, sea island cotton can be grown.
Self-sufficiency is low.
The consolation is that Amba has beautiful scenery, mild climate and complete facilities. It is famous for its beaches, international rowing competitions, carnivals and wild animals.
The tourism industry accounts
for about 2/3 of the total GDP, and its employees account for 68.4% of the
total employment, making it undisputed the country's number one pillar
industry. In addition, Anba is also rich in forest resources. The forest
coverage rate accounts for 20.5% of the country's land area, and all of them
are natural forests, rich in a variety of high-quality woods.
Antigua and Barbuda scenery
Due to the extreme scarcity of natural resources, Antigua's
industrial and agricultural foundation is extremely weak, and its output value
accounts for a very low proportion of GDP. Therefore, for a long time, it has
only been overly dependent on tourism income and British aid. However, since
the tourism industry is greatly affected by the climate, once a serious natural
disaster (mainly a hurricane) is encountered, the consequences will be disastrous.
For example, on September 6, 2017, Hurricane Irma swept across Ambar, causing
huge damage to the country's economy, while the entire island of Barbuda was
almost reduced to rubble.
In addition to natural disasters, the Great Depression of the world economy that started in April 2000 has also hit Antigua and Barbuda hard, causing the country's total GDP and per capita income to show a sharp decline.
In order to solve the dilemma of economic development and increase financial
resources, Antigua and Barbuda actively learned from the Cayman Islands,
Bermuda and the British Virgin Islands, and made great progress in economic
development by vigorously developing the financial service industry. In
addition, the gaming industry has also become an industry actively developed by
Antigua and Barbuda, and it has also made a great contribution to the recovery
and development of the economy.
Antigua and Barbuda after the hurricane
After more than ten years of hard work, Antigua has become a world-renowned offshore financial center. Although it is far less famous than the Cayman Islands, Bermuda and the British Virgin Islands, its achievements are still very bright.
As of 2004, dozens of offshore banks and trust investment companies and thousands of international business companies were registered in Antigua and Barbuda, among which there are many world-renowned institutions such as Royal Bank of Canada, Scotiabank, and Horson International Accounting Firm. The registered capital is as high as hundreds of billions of dollars.
The reason why big global companies are keen to register in
Antigua and Barbuda is that in addition to the low registration threshold and
loose supervision, the financial management legal system is complete, the
management system is sound, the tax rate is extremely low or even no tax, etc.,
are also very important reasons. For example, companies registered in Antigua
and Barbuda do not need to pay the usual tax items such as capital gains tax,
wealth tax, stamp duty, inheritance tax and capital transfer tax, and there are
no restrictions on the repatriation of profits and imported capital to the
country. Not only that, Antigua's standards for investment immigration are
quite low, as long as you buy a property worth more than 400,000 US dollars,
you can be naturalized.
St John's, capital of Antigua and Barbuda
It is precisely because of the above preferential conditions that it has become a fashion to go to Antigua and Barbuda to register a company or invest in immigration, which will strongly stimulate the country's economic growth.
Today, the offshore finance industry in Antigua and Barbuda has become the second-largest industry after tourism, bringing the country a bonanza of money every year. However, while providing convenience for enterprises, Antigua also facilitates illegal tax avoidance and money laundering for the latter, thus obtaining the title of "tax haven" and is often investigated and even sanctioned by the United States and the European Union.
It is precisely because the tourism, offshore finance and gaming industries have brought huge wealth to Antigua and Barbuda, this small country with scarce resources, a very small population and frequent disasters can get out of poverty and live a relatively prosperous life.
According to
statistics from the World Bank, Antigua's per capita GDP in 2019 was US$17,790
(about 124,530 yuan), exceeding the average standard of developed countries and
showing a trend of increasing year by year.
Antigua and Barbuda
Precisely because it is quite rich, the Anba government has the confidence to implement various high welfare policies such as free medical care, free education, high pensions, and food subsidies. In addition, the distribution of social wealth is relatively equal, the political situation is stable, the public security is good, and ethnic relations are harmonious. As a result, the standard of living of the people is very high and the sense of happiness is overwhelming.
According to the 2019 Human Development Index released by the United Nations Development Program, Antigua and Barbuda ranks 74th among 189 countries, 8 places higher than China, and belongs to the "high human development level".
The smallest country in the Western Hemisphere, with an area less than 1/4 of Hong Kong's, it gets rich from tourism and finance
Today, the offshore financial industry in Sunny has become
the second largest industry after tourism, and it can bring in a lot of money
every year. However, while providing convenience for all kinds of multinational
enterprises and investment immigrants, Sunny also facilitates illegal tax
avoidance and money laundering for enterprises, organizations or individuals in
individual countries or regions, thus obtaining the title of "tax
haven".
Up to now, there are 197 independent sovereign states in the
world, of which 33 are less than 10,000 square kilometers. Although these
"pocket countries" are small in land area and small in population,
many of them are "rich and oily" high-income countries. Among them,
St. Kitts and Nevis (hereinafter referred to as "St. Kitts and
Nevis"), the smallest country in the Western Hemisphere Ni”), is a typical
representative.
Saint Kitts and Nevis Description
Located in the north of the Leeward Islands in the Eastern
Caribbean Sea, St. Nicholas is composed of islands such as St. Kitts, Nevis,
and Sambrero. The smallest country in the Western Hemisphere, with a total
population of about 57,000, its capital is Basseterre. Saint Nicholas was
originally an Indian settlement. It was discovered by the great navigator
Columbus in 1493 and became a British colony in 1623. It was not until
September 19, 1983 that it won independence. Saint Nicholas joined the
Commonwealth after independence, and continued to support the British King as
the head of state.
In all fairness, the living environment of Saint Ni is not good. In addition to being a small country with few people and frequent disasters, the natural resources in the territory are extremely scarce. There are only a small amount of plant resources and fresh water resources.
The agricultural scale is also relatively small, mainly planting sugarcane, bananas, Coconut, cotton and other cash crops, few food crops. Because of this, Saint Lucia's industrial and agricultural foundation is extremely weak, its output value is very low, and its self-sufficiency rate in grain, food and daily necessities is extremely low, and most of it needs to be imported from the United States, which invisibly increases financial pressure.
St Kitts and Nevis scenery
The consolation is that, with its beautiful scenery, mild climate and numerous scenic spots, Sannee is known as the "Back Garden of North America" and "Pearl of the Caribbean Sea".
In the early
1960s, when the Castro regime came to power, Cuba closed its luxury casinos and
beach venues, forcing tourists from Europe and the United States to turn to
other parts of the Caribbean for sightseeing and consumption, thus providing a
platform for the development of tourism in Saint-Nee. good opportunity. To this
end, the colonial authorities built hotels, beaches, airports and other
facilities in the territory, which enabled the rapid development of tourism.
After the independence of St. Nicholas, successive governments still implemented the strategy of focusing on the development of tourism, and continued to build and expand various facilities according to the needs of the situation, especially the construction of two five-star hotels - Marriott Hotel and Four Seasons Hotel. Make tourism to a higher degree of development.
Today, tourism has become the No. 1 pillar industry in St. Nicholas, receiving more than one million tourists every year, and it is also the most important source of foreign exchange earnings for the country.
Saint Kitts and Nevis after the hurricane
However, the tourism industry is greatly affected by the
climate, and once it encounters a serious natural disaster, the consequences
will be unimaginable. For example, in the fall of 2017, two hurricanes
"Imaha" and "Maria" above Category 5 swept across the
Caribbean and the United States. Although they did not make landfall directly
in Saint Kitts, they still brought damage to the country's public sector and private
property. Dangerous, the economic loss was as high as 150 million US dollars,
and the number of tourists fell sharply that year. Therefore, in order to avoid
the uncertain risks brought about by over-reliance on tourism, Saint Kitts also
vigorously develops the offshore financial industry, thus adding "double
insurance" to economic development.
Long before independence, Saint Kitts began to develop the offshore financial industry. After decades of development, it has now become one of the world's leading offshore financial centers.
Because of its mature financial system, highly developed judicial and professional talent structure, stable political environment, complete commercial legal system, and extremely low tax rate or even no taxation, no foreign exchange control, and set standards for investment immigration.
Due to its inferior advantages, it has become an
investment, registration and immigration destination for major companies or
wealthy people around the world.
Offshore finance industry in Sunnyney
Today, the offshore finance industry in Sunnyney has become the second largest industry after tourism, bringing in billions of dollars every year and creating a large number of jobs in the country. However, while providing convenience for various multinational enterprises and investment immigrants, Sunny also facilitates illegal tax avoidance and money laundering for enterprises, organizations or individuals in individual countries or regions. EU investigations and even sanctions.
In addition to tourism and offshore financial industry, Sunny received a large amount of foreign aid every year, of which the amount received in 2016 accounted for about 20% of the total GDP. It is precisely because of tourism, offshore financial industry and foreign aid that have brought a steady stream of huge wealth to Saint Ni, this small island country has been able to get out of poverty and live a fairly prosperous life.
According to the
statistics of the World Bank, the per capita GDP of Sunny in 2019 was 19,896 US
dollars (about 139,272 yuan), which exceeded the minimum standard of developed
countries (12,055 US dollars), and showed a trend of increasing year by year.
Saint Nicholas Government Confidence
It is precisely because it is quite wealthy that the government of Saint Nicholas has the confidence to increase investment in various social welfare undertakings such as medical care, education, and pensions.
In addition, the distribution of social wealth is relatively equal, the political situation is stable, and the public security is good, so the living standard of the people is quite high. Happiness is good.
According to
the 2019 Human Development Index released by the United Nations Development
Program, Sunny ranks 73rd among 189 countries, 9 places higher than China, and
belongs to the "high human development level".
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