Tell Me about Tax Havens
Many individuals decide to bank, do business, set up retirement trusts, and retire offshore because many offshore jurisdictions are tax havens. The term tax haven refers to a jurisdiction that is tax advantaged in some way. Not all tax haven jurisdictions are alike. Depending upon the needs of a corporation or individual, different one offshore jurisdiction will be more appropriate than another.
What are the advantages of a tax haven? A so called tax haven may levy no significant taxes. It may have very low tax rates. It may only tax income earned in the country. Some jurisdictions may have tax treaties with your nation of origin barring double taxation of income. Besides, similar to tax incentives offered in countries around the world, an offshore tax advantaged jurisdiction may offer want to attract investment with special tax treatment for investment, for retirees moving to the country, and the like. For companies setting up business in an offshore jurisdiction there can be meaningful tax incentives such as long term forgiveness of taxes for investing in a wide range of businesses and/or for employing local people. Here are six broad classes of tax havens as of this writing.
The Jurisdiction Does Not Levy Any Taxes
No tax, tax havens include the Bahamas and Bermuda, Anguilla and the Cayman Islands, Nevis, Turks and Caicos, as well as St. Vincent, and Vanuatu.
Only Income Gained in the Jurisdiction is Taxed
Countries such as Panama, Costa Rica, and Belize in Central America, Gibraltar, Liberia, and Hong Kong only tax your income if you obtain it from investments and business in that tax jurisdiction.
No Double Taxation Plus Low Taxes
Nations that provide the benefit of no double taxation plus low tax rates include Singapore, Luxembourg, the Netherlands, the Netherlands Antilles as well as the British Virgin Islands.
Unique Tax Laws
The Isle of Man and the Channel Islands have a number of unique laws and provisions that are attractive to those wishing to reduce their tax burden.
Individuals Get a Break
Monaco, Andorra, Sark, and Campione d’Italia all provide individuals with unique and often beneficial tax treatment.
Tax Advantaged Jurisdictions for Businesses
International business companies often find favorable tax laws in Jamaica, Montserrat, Grenada, Barbados, and Antigua.
It Is Not All Just About Taxes
When you plan to set up business offshore remember that the laws of the country regarding offshore businesses may be crucial. You would like to obtain the lowest possible tax rates or not pay any taxes. However, if local rules and regulations make it hard to do business this may offset any tax advantages. Investigate, get good advice, think about it before making a decision. For help in this regard leave a comment and we will get back to you.
Note: For competent advice visit www.RobertGirga.com
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