Many countries are considered tax havens due to their friendly policies that allow companies or individuals to save money on taxes. Many countries adopt these policies to encourage corporations and high net worth individuals to move there or invest in companies there.
Recently, the International Business Times reviewed corporate tax policies from around the world. According to its team of experts, the following are the top corporate tax havens.
Bermuda does not charge corporate income taxes. Additionally, there are no double tax agreements in this country. Bermuda was on the EU blacklist, but it was removed in May after taking care of concerns related to tax evasion. Even so, it remains a tempting corporate tax haven for businesses.
The Cayman Islands is a British territory that is known for its lax tax laws. The Caribbean nation does not charge any taxes on corporate profits, personal income, or capital gains, leading to its appeal as a tax haven for both individuals and corporations.
Hong Kong appeals to corporations and wealthy individuals due to its policy of not charging taxes on dividends, interest, or capital gains. Additionally, the jurisdiction has a strong commitment to protecting the privacy of those who invest there. Companies do not legally need to prepare financial statements for the authorities in this special autonomous region.
Ireland has faced controversy over policies that lead to its potential classification as a tax haven. Companies can have a tax rate of just 12.5 percent, and that figure is before any potential deductions. To make Ireland even more appealing to corporations, revenue that is part of the company’s intellectual property or patents only faces a tax rate of 6.25 percent. Ireland even offers the ability to create special-purpose vehicles that further reduce taxes. To cement the countries’ perception as a tax haven, it has almost no financial transparency when it comes to transnational corporations.
Luxembourg is a tiny country between France, Germany, and Belgium and is a popular tax haven. PriceWaterhouseCoopers and Amazon are just two of the multinational corporations with presences in the country to take advantage of the low taxation rates.
Mauritius, an African island country, has a long list of agreements with other countries to help investors and companies avoid paying double taxes on income. Additionally, companies and investors alike can enjoy high levels of financial secrecy in Mauritius.
The Netherlands is frequently considered one of the major European tax havens. It is possible for large multinational companies to negotiate special tax deals with the Dutch authorities. This makes the country incredibly appealing for corporations, many of whom will just set up small shell companies there. They then move their profits through these shell companies to somewhere in the world with no or minimal taxes.
Singapore is another well-known Asian corporate tax haven, as there are no taxes on capital gains. Additionally, the tax rate for incomes higher than $2.7 million is just 17 percent. On top of those policies, the country offers tax breaks for offshore trading companies and foreign banks.
Switzerland is another European tax haven that most corporations and high net worth individuals are aware of. It has low taxation on foreign companies. Interestingly, the country used to be more secretive for foreign investors than it currently is. Even so, it still maintains its appeal and earns a spot on many lists of corporate tax havens, including that from the International Business Times.
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