Thursday, 20 December 2018 15:28

Are Tax Havens Out of Business?

Are Tax Havens Out of Business after the G20 Tsunami?

Tax-Havens-TsunamiBy Giovanni Caporaso

Ever since the times of De Gaulle we have continue to hear that tax havensare over with. The last meeting of the G20, put another nail in the coffin with the publication of black list and grey list fiscal shelters, even though the official lists should be drawn up and published shortly by the Organization for Cooperation and Economic Development (OCED). In practice, however, it seems that this list is interested only in banking systems, in fact, since they don’t know who they should blame for the world financial crisis, they have declared war on the banking secret. 

The tax havens have always been a cross and a delight for the world economy; according to some they are the dark side of international finance, but it’s a necessity of the economic system. Other than being used by thousands of taxpayers they are, in fact, used primarily by the big corporations, often even by those in which the State participates or are State-controlled. It is estimated that in the European Union tax evasion reaches an average of 2.5% of the GPD.
After all, up until now, tax havenshave been essential mainstays of the economic globalization, with a considerable incidence in the financial system. Keeping in mind the fundamental role of these countries in the mechanism of globalization the elimination would provoke enormous economic and financial dysfunctions.
To my way of thinking, also this last crusade begun by the G20 is nothing more than a scarecrow for deterring the “little guys”, or rather, those taxpayers who thanks to internet and to the decline in offshore prices have recently gained access to this world which until the last decade was a prerogative of the large capitalists. The Earth’s powerful (G20) want to give themselves the right to meddle, beyond the national sovereignty and this is the thesis of the new world order. In times of crisis, however, you need to move slowly and an eventual suppression of tax havenswould risk the provocation of an international financial collapse. During a period of recession, which State can allow that?
Today, those who preach should first clean out their own homes, beginning with the dozens of corporations controlled by or participated in by Eni or Enel in Delaware, in the Bahamas, in the Caymans, in Luxembourg and in many other countries. And then let’s not talk about the special statute regions and areas that take advantage of tax exemption in many of the G20 countries.
Those with capital will always search for the most profitable market and the most favorable taxation system. This is the logic of capitalism and globalization favors it.
This battle against tax havenshas just begun and will probably obtain at least one of the desired results: an increase in the costs of offshore services and the reduction of their accessibility. In practice, it’s always the little guy who pays. Those who have stolen for decades and have reduced the international financial system to the poverty level want their citizens to only have the right to pay taxes. Pay to heal the errors of others. That is the logic of the strongest; it is a controlled world and full of robot citizens, like in those futuristic films that present a society manipulated by an entity that is above the law and the individual.
I’m sure that there still exists a way to rebel and to live life like men and not sheep. For now the tax havensaren’t out of business, their strength will also depend on the number of people and the amount of capitalists that aren’t willing to submit themselves to the new world order. 

Published in Taxhavens
Thursday, 20 December 2018 13:50

The new mini tax havens

Shanghai-frre-zoneQuite a few experts believe the new generations of free ports will be the solution for the development of various businesses that will be conducted in these “mini tax havens”. Free ports or free zones are areas with flexible jurisdiction compared to the country in which they are situated and have evolved as centers for commercial and manufacturing exchange.
The new generation of free ports is usually built near airports and focuses on storing small, portable and high value goods, such as gold ingots, antique art, documents, and microchips, among others. The best definition for understanding how the new ports work would be to think of a traditional bank deposit; but instead of bank vaults, they are free zones, and you will thus use them as best suit your needs without having to declare it to customs.
From a fiscal point of view, free ports fall under “no man’s land”. The "free" part refers to suspending customs duties and paying tax. Many of the goods stored in these ports remain there for decades without this causing a problem or attracting the eyes of investigators. In addition, sales of goods at free ports do not include value added tax or taxes on capital gains. These goods are technically payable in the destination country when the item leaves this so-called “parallel fiscal universe”.
One of the main advantages of free ports is the possibility of doing business that they offer: selling, buying and exchanging goods. Free port operators have been wise enough to understand that there is a big demand. Several facilities have been created at these free ports, and telecommunications services are usually excellent.
One of the best known examples in the world is the Free Trade Zone of Colón, Panama, at the end of the Panama Canal where goods can be freely unloaded in the free zone without passing through Panamanian customs. These goods can be traded and loaded directly onto ships or transferred to the Tocumen International Airport for export.
While Colón is only used for exchanging, other free zones are used for manufacturing. Nearly 70% of exports from the Dominican Republic, especially textiles, are manufactured in areas like this This was possible because that country’s government allowed a law so that free zones would also operate as financial centers.
Most analysts consider that while borders will be increasingly less important in the future, more businesses may be conducted in “parallel fiscal universes”, and in light of this reality, it is possible to predict that more free ports will be built all over the world. This will create a network linked by air routes thus providing international business with a better outlet.

Published in Tax Planning
Thursday, 20 December 2018 13:43

Privacy in Tax Havens

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Privacy can be defined as something we have the right to protect and conceal from others. There is a type of privacy that is very much linked to Tax Havens and offshore businesses that affects personal, tax, financial economic data called privacy in Tax Havens.
Most governments, led by the United States, are passing laws and regulations to strengthen the fight against international terrorism, drug trafficking and money laundering. Many times, these measures seriously limit some individual freedoms, in addition to compromising the right to privacy of many innocent citizens. There is no lack of protests that consider that there are shady political and economic reasons behind supposedly legitimate purposes.
Today, there are more people concerned about maintaining confidentiality and all of their financial transactions. Privacy in Tax Havens offers ideal support because it has strict privacy and banking secrecy laws. However, at times it has been used to commit tax fraud or carry out illegal activities, thereby harming legitimate offshore business.
By avoiding public exposure of property that a person owns, he/she can abort different threats such as lawsuits by unscrupulous individuals who only seek financial gain, extortions by Mafia or criminal gangs, lawsuits by creditors who intend to go beyond corporate responsibility, etc. There may also be other reasons of a corporate nature such as confidentially participating in another company, or of course, personal reasons.
But it is useless to seek privacy in Tax Havens if you leave tracks in the form of email, letters or bank traffic. In this regard, the offshore or related sectors have developed various services that pursue the goal of total privacy in offshore businesses: virtual offices, where email is received at locations other than the address itself; virtual telephone numbers; telephone numbers in other countries where the client’s telephone calls are rerouted; encrypted solutions for email that prevent emails sent via the network from being read; anonymous web browsing software or concealing IP to surf the Internet and send email without revealing the user’s location; offshore web hosting and private domains, which are servers located in safe offshore locations; anonymous credit cards for online payments and withdrawals at ATMs without recording the user’s identity.
Other services are anonymous online payments via electronic money; different types of electronic currencies with which payments may be made anonymously; economic citizenship or second passport programs, normally assigned to people who wish to leave their country or renounce their nationality in order to obtain tax windows or operate offshore businesses with greater privacy; alternative drivers' licenses. They are available in certain countries and serve as alternative identification, similar to a passport; and camouflage passports and various identifications that lack legal force, but are used to feign another identity under certain circumstances.

Published in Tax Planning
Wednesday, 19 December 2018 20:16

What is a tax haven?

These are very low tax-laden jurisdictions, with very friendly tax regimes for those who decides to put their money in the banks. For pensioners and those who manages large fortunes, tax havens are very attractive places, because they allow them to carry out legal operations that affects a lower tax burden. But the map of tax havens, product of the pressure, is changing and more and more the jurisdictions that joins the information exchange treaties (that is, they share financial data of the people). Among those who have signed treaties we find the always neutral Switzerland, Cayman Islands, Ecuador, Bermuda, Isle of Man, Jersey, Gibraltar, Mauritius, Philippines, and even Barbados, Chile, Dominica, India, Niue, Seychelles, Uruguay, Trinidad and Tobago. In Europe, jurisdictions have also received heavy pressures, for example, Liechtenstein, Vatican City, San Marino and the Principality of Monaco have surrendered, and thus have ceased to be attractive to those who resorted to these jurisdictions to save money on taxes. The problem does not ends there, but for 2018 other countries announced that they will join the standard: Andorra, Saudi Arabia, Australia, Bahamas, Belize, Brazil, Brunei, Canada, China, Costa Rica, Dar es-Salaam, Grenada, United Arab Emirates, Hong Kong, Indonesia, Israel , Japan, Marshall Islands, Macao, Malaysia, Monaco, New Zealand, Qatar, Russia, Saint Kitts and Nevis, St. Lucia, Saint Vincent and the Grenadines, Samoa, Singapore, San Martín, Turkey.

Published in Taxhavens