15 countries with the lowest taxes
Because of the level of taxation in most industrialized countries, many turn to tax havens. Tax havens are places where people and companies move to avoid paying high taxes. Writes about it GoBankingRates.
The International Monetary Fund estimates that tax havens cost governments between $ 500 billion and $ 600 billion a year - mostly in corporate tax revenues that they cannot collect. In addition, at least 366 Fortune 500 companies are establishing at least one subsidiary in tax havens.
According to the Institute for Taxation and Economic Policy (ITEP), by 2017 Apple had reserved $ 246 billion in offshore, avoiding taxes of $ 76,7 billion. Apple began to repatriate this money after US President Donald Trump cut the tax on this money from 35 % to 15,5%.
The Bahamas is a former British colony that gained independence in 1973. This Caribbean island country attracts tax evaders due to the lack of withholding or corporate taxes. Instead, it receives income from taxes such as import duties, value added taxes, and license fees. This and their proximity to the United States make them an attractive tax haven.
The islands have become the center of banking. Companies also benefit from privacy laws that do not require accounting records to be submitted to the government. For this reason, one can understand why Goldman Sachs and JPMorgan Chase operate subsidiaries there.
Situated between the United States and Europe, Bermuda has become a popular tax haven. As in the Bahamas, there is no corporate income tax, interest, dividends or royalties. Corporations such as Nabors Industries and Signet Jewelers have decided to base their activities in the overseas territories of Great Britain.
Bermuda has also been at the center of prominent tax evasion schemes. The Paradise Papers reported that Nike transferred part of its tax-free European profit from the Netherlands through Bermuda. Google also hid $ 23 billion from overseas countries in Bermuda in 2017. Regulators put pressure on countries to close some loopholes that make such revenue transfers possible. However, given the policies of this territory and its proximity to the United States and Europe, it is likely to remain a popular financial and business center.
The British Virgin Islands
The British Virgin Islands, like Bermuda, remain outside British possession. However, as in Bermuda, a mild disregard for British rule allowed for tax haven status. Despite a population of less than 36, more than 000 companies reside in the British Virgin Islands and their assets are valued at approximately $ 400 trillion.
The Deloitte International Tax Guide states that the islands are not taxed on interest, dividends or corporate income. However, they are subject to a payroll tax of 10% or 14% of all income over $ 10. Financial services also make up 000% of government revenue.
Officials insist that the British Virgin Islands are not a tax haven country.
Like other British overseas territories, the Cayman Islands has become one of the most visible tax havens. Despite the fact that the country's population is just over 59 people, more than 600 companies are based on this territory. These include US depository or holding companies that allow Alibaba, Baidu, and other companies in China to trade on US stock exchanges.
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Crystal Stranger, a lead accountant at Greenback Business Services, says the islands are "probably the biggest (tax) loophole currently for both individuals and multinationals." One area where it excels is banking. Despite its small size, according to The Guardian, it accounts for almost 1/15 of the world's $ 30 trillion in banking assets.
The Channel Islands are an archipelago off the coast of Normandy. Despite their location, the islands do not belong to either France or the United States. However, English is one of the official languages and Britain is responsible for protecting the islands. There are actually two British crowns on the islands: Bailiwick Jersey and Bailiwick Guernsey.
However, the Channel Islands became best known as the tax haven. Corporate taxes for most companies are 0%, although they rise to 10% if the company is labeled as a “financial services company” and can go up to 20% for other types of companies. It also does not levy capital gains or inheritance taxes. According to Paradise Papers, Apple transferred tax residency to Jersey in 2014 and saved up to $ 252 billion in offshore cash in Jersey.
Isle Of Man
The Isle of Man is a self-governing British island located in the Irish Sea between England and Ireland. Besides being known as the birthplace of the bee Gis, it is also known as a place to protect wealth.
The Isle of Man is not subject to capital gains or inheritance taxes and does not levy taxes on companies. Many companies also hold retirement benefits there, as some beneficiaries can receive benefits as early as 50 years old. However, they like to keep a low profile. When Paradise Papers shed light on how wealthy people defended assets, a local politician called this revelation "an organized attack from the international media."
Back in the 90s, Ireland was considered one of the poorest countries in Europe. However, EU accession and lower corporate taxes to 12,5% seemed to transform the country overnight. She continues to attract over 700 multinationals to the country, including Airbnb, Facebook and LinkedIn.
While Irish officials may evade the label “tax haven,” the country has been closely monitored. In 2013, Apple was forced to pay a record fine of 13 billion euros ($ 14,4 billion) after it turned out that the deal between Apple and Ireland violated EU tax laws. According to Paradise Papers, this has led Apple to move its cash abroad to the Channel Islands.
Luxembourg is a small EU country located between France, Germany and Belgium. This country of about 614 has managed to raise capital thanks to business-friendly tax legislation. However, the policy seemed too friendly for the EU, which said it was one of the countries "showing the characteristics of a tax haven and encouraging aggressive tax planning."
However, Luxembourg remains a favorite place among the Fortune 500. About 35% of Fortune 500 corporations operate a subsidiary in Luxembourg, according to ITEP. Among them is Amazon, which has chosen Luxembourg as the home of its European headquarters.
Malta is a sovereign country off the coast of Sicily. It is one of the smallest members of the EU. Once a British colony, this tiny island nation with a population of just under 500 became independent in 000.
Some journalists call Malta a “pirate base” for tax evasion. In Paradise Papers, Malta is also listed on tax havens. However, officials insist that they comply with EU laws.
Although local companies pay a corporate tax rate of 35%, some external organizations pay 0-6,25%. According to ITEP, just under 5% of Fortune 500 companies operate a subsidiary on the island. Morgan Stanley, Marriott International, and Abbott Laboratories are among these corporations.
The tiny island nation off the coast of Madagascar seems like an unlikely place for tax haven. However, the corporate tax rate attracted a large percentage of the Fortune 500 to Mauritius. Companies pay a 15% tax on their income. Individuals do not pay capital gains tax, and the country levies a 3% tax on dividends from abroad.
The Principality of Monaco is a city-state with an area of 0,85 sq. miles located on the French Riviera. Long a favorite spot for the world's wealthy, it has also become an attractive destination for wealth itself. Individuals do not pay income tax and businesses do not face direct taxation in most cases.
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Despite low taxes, working in Monaco is not cheap, as it boasts some of the most expensive real estate in the world. Despite costs, according to ITEP, seven Fortune 500 companies operate subsidiaries in the Principality.
The Netherlands is the most popular tax haven in the world among the Fortune 500. The Dutch have long allowed corporations to reduce their tax burden by moving money through Dutch subsidiaries. Moreover, technology giants such as Google and IBM have a significant presence in the country, and Fiat Chrysler has chosen the country as its headquarters.
In the United States, the tax season of 2018 left taxpayers with an average refund of $ 3. Many taxpayers seek to protect this refund or find a suitable place to spend or invest a refund. But what if you never had to give money to the government?
Permanent Puerto Rico residents generally do not pay US federal income tax, although Puerto Ricans are US citizens. In addition, in 2012, Law 22 extended the tax exemption to interest, dividends and capital gains. This gives wealthy Americans the opportunity to avoid taxation.
Many consider Singapore one of the best tax countries in the world. Located at the southern tip of the Malay Peninsula, it was once mired in poverty. In 1965, per capita GDP was only $ 516. It was then that the government began to improve education, suppress corruption and reduce tax rates.
Singapore estimates corporate income tax at 17%, not including tax breaks, and the city-state does not tax dividends. According to ITEP, more than 40% of Fortune 500 companies managed a subsidiary in Singapore in 2016.
Switzerland has long served as the European financial center. Low taxes and a reputation for secrecy made him a tax haven. While some privacy laws have already been lost, his reputation for reasonable taxation remains. Switzerland charges a corporate tax rate of only 8,5%.
Although the Long Finance Global Financial Centers Index no longer includes Zurich in the top 10 financial centers, it remains a popular tax haven. According to an ITEP report, about 35% of Fortune 500 companies have at least one subsidiary in the Swiss Confederation. Such corporations include Marriott International, Morgan Stanley and PepsiCo.
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