Tax Havens for offshore company
Top 7 Best Tax Havens in the World
Paying a significant amount of your earnings as tax? Well, it is the duty of every citizen to pay their taxes of time. However, it is not always possible to bear a hefty amount of tax, especially corporate tax, and reports indicate that more than fifty most successful corporations operating in the United States have stored their profits in different offshore companies for avoiding tax payments. If reports are to be true, companies like Alphabet, Apple and Microsoft have deposited a significant amount of cash in different offshore tax havens for minimizing the amount of corporate taxes. Not only the business corporations but also several celebrities have deposited their earnings in different tax havens to avoid excess the burden of income tax. If you are also looking for tax havens to secure your earnings, it is better to know the basic information related to it.
What are tax havens?
The term tax havens refer to the countries, which provide foreign businesses and individuals limited or no tax liability for their financial investments. All tax havens across the world maintain a static environment both in terms of economy and politics. Not only this but also the tax havens does not disclose any financial information with the tax authorities of other countries. This means, the tax department of your country will not be able to know about your investment until you disclose the information. Countries offering tax havens to foreign nationals or business do not need to business or residential present of the depositors. Therefore, there is no need to worry about your nationality.
Top 7 best tax havens in the world
Several countries in different parts of the world act as tax havens for business houses and individuals. If you are struggling to bear the hefty amount of corporate tax and looking for a safe place to deposit your cash by paying less or no tax, you can take a peek at the top seven best tax havens in the world.
Bordering Germany, France and Belgium, the small European country of Luxembourg offers tax havens to investors from far and wide. With a limited population of 550,000 the country has business friendly laws allowing the international companies to invest a significant amount of their business here and avoid billion dollars tax bills. As per the reports published in Citizens for Tax Justice and U.S. PIRG Education Fund of 2014, around 33 percent of the companies listed in U.S. Fortune 500 lists have different subsidiaries in this country.
According to the reports, Cayman Islands is one of the best places of hoarding the excess cash earned by the business houses. The taxation policy of this country allows the corporations to form and operate without paying any kind of taxes. Not only that but also individuals with can at ease retain their assets in this country without worrying about tax payments. Though the country does not consider this illegal to avoid paying taxes but many people consider the policies here to be quite complex and can be sorted with professional assistance. A report published in The Guardian stated that Marriott, Pepsi, Pfizer and even Fargo Wells have subsidiaries in Cayman Islands.
Isle of Man-
Located between England and Ireland, this is the best place for securing your pension money. The huge benefits that the country’s taxation policies offer to the pensioners have made many international companies to open employee pension plan accounts in this country. Isle of Man is known for offering excellent asset protection without charging any stamp duty, corporation tax, inheritance tax or capital gain tax. Though the country has excellent savings plan for international businesses, it is not a good choice for individuals looking to save their money in different tax havens.
Even though the Irish officials beg to differ from the fact that Ireland is an excellent tax haven for many international corporations, several reputed business houses have incorporated their offices here and dodged billion dollars taxes. According to the reports of American for Tax Fairness, Pfizer’s merger with Ireland-based company, Allergan has helped them in evading taxes on $148 billion of profits that the company has made internationally. Not only Pfizer, Apple too has incorporated their business in Ireland for dodging US taxes.
The small island of the Indian Ocean, Mauritius has attracted foreign investments for several years. Even though the country charges corporate tax at a rate of 15%, there is no taxation on interest and capital gains. Also, companies with tax residents of this country are entitled to reap the benefits of tax breaks offered through double tax treaties. The Wall Street Journal has reported that companies like JPMorgan Chase, Pepsi as well as Citigroup have their subsidiaries in the country.
With no capital gains tax, gift tax, personal income tax as well as inheritance tax, The Bahamas is another popular tax haven of the world, especially of the US nationals. Though the taxation policies of this place has attracted several wealthy investors, it is favorite of the elderly people as they prefer to limit paying taxes on whatever they save for inheritance or gifting.
One of the most beautiful places on earth, Switzerland has an attractive taxation and banking policies for the wealthy people. Irrespective of your nationality, you can open a bank account here and save all your money without worrying about any kind of disclosure. Low tax rates and the banking policy of the country, which give utmost importance to maintaining secrecy of the account holders, have made it a popular choice among corporations as well as individuals. Many US companies like Morgan Stanley, Stanley Black & Decker, Pepsi, Ecolab and Marriott have opened up their subsidiaries here.
Each of the tax havens has their own set of norms and it is essential to learn them carefully before making any financial transactions.