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Tax havens and their merits

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Accused as the ?black hole' of international economics in the recent years, tax havens have been highly criticized. Various studies from organizations, state and financial centers estimate that tax havens contributed about 55% in international trade and 35% in financial flows. An advance of $ 10,000 billion was considered as assets under management.

Tax havens receive one-third of their direct investments from abroad and multinationals. The Unified National Union of Taxation estimates that each year the tax leakage would result in a direct loss of €45 billion for the French state. According to the IMF, money laundering done through tax havens were accounted to be in the range between $800 and $2000 billion per year.

The principle of tax haven mainly aims to receive preferential treatment abroad (or offshore) with respect to the tax rates charged in the State of origin. As in historical incident although tax practices variation cannot be dated, the merchants of olden days already planned arrangements by offshore trade, and thus escape from the port taxes.

Clearly, the tax haven, also called "tax haven" (tax haven) by the English or "tax oasis" (Steueroase) by the Germans, cannot have a precise definition. Like any concept that affects all of world population, it can give no uniform definition. Indeed it will vary depending on the design of each State to a tax rate of "normal" and international institutions will be more or less broad in their definition depending on the purpose and the object pursued by them (Type OECD, IMF).

Insignificant or nonexistent taxes variable, but if tax rates are very low or no relation to a tax rate "average" in other countries; lack of transparency on the tax; tax laws are applied in an "open and consistent"; information to determine the amount of tax payable by a taxpayer available (accounting records, supporting documents).

System of exchange of information "on demand" (competent authorities of a country are asking those of another country-specific information). There are essential elements of implementation of appropriate safeguards for taxpayers' rights and confidentiality.

No substantial activities (deleted since 2001) included in 1998 Report: Only tertiary activities which do not require substantial implementation (services, advice). Strive to attract investments and transactions motivated by tax considerations. In 2001, the Committee on Fiscal Affairs of the OECD requested that this criterion is not used to decide whether a tax haven and was uncooperative.

Tags: tax; tax havens; merits of tax havens

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