Subject of tax havens is one of the most controversial topics in journalism. On the one hand, politicians and representatives of the fiscal system complain about tax havens emphasizing their negative impact on the level of budget revenues in the country. On the other hand, tax havens are praised – particularly by the law firms that specialize in providing services to use them – as a way to reduce taxes.
In order to assess the effect of tax havens should be made to the fiscal oppression in different countries. But it is a matter for discussion for another study.
This paper aims to define the tax havens, describe the types, specify the position in international law and show some examples, point out their advantages and disadvantages, to discuss a “black list” of the Polish Ministry of Finance and to consider the legal and tax consequences of the use of tax havens.
Definition of the term. Sense of the existence of tax havens.
The original definition of a tax haven as it defined the state with lower tax thresholds or milder treatment of taxpayers. In this approach, the definition of tax havens, the Republic of Poland would be “tax haven” against Germany and Estonia or Slovakia to the Polish Republic. After all, everything can be reduced to a discussion about the level of taxes (personal income, income tax).
In this perspective, the definition of “tax haven” it must be admitted that the Polish interest lies in preventing harmonizing tax rates and – much harder to understand what Polish politicians – to seek to reduce these rates.
However, countries in the level of competition to combat income taxes levied limited definition (probably in order to gain allies) to the heavens with a particularly favorable income tax collection system.
Hence, the current definition of “tax haven” is “state, in which the tax laws are extremely mild for foreigners and foreign capital.”
As targets for the existence of tax havens given transfer profits and avoid paying higher taxes in their home countries. It should be noted that no one asking about the reasons why an entrepreneur would make breakneck tricks and make use of tax havens.
Types of tax havens
Must distinguish between two types of tax havens.
The first one protects the money gained in a fraudulent manner – through criminal activity or abuse of political position.
The second one is charged honestly earned income, to a lesser extent than in other countries.
Unfortunately, it is currently more attacked the second type. As an example, the United States should be given the state of Florida, which is not criticized by legal provisions prohibiting the recovery of real estate in the state, even if they were criminals or corrupt politicians.
The second type is subject to condemnation states with lower taxes. These two forms take two forms:
1. First, be criticized countries imposing lower taxes (an example is Poland criticized by Germany and France on the level of corporate income tax).
2. Second State be criticized particularly soft treats taxpayers.
The second type is explicitly defined as tax havens.
Types of tax havens
Tax havens offer equal kinds of special services:
1. Provide protection of assets from creditors
The main goal of this type of legal formula weight is to protect assets against the risk of claims by third parties. At the same time, these entities are required to manage its assets for the benefit of specific beneficiaries – those indicated in the corporate documents. This makes it the largest claims can not be met from the assets of the benefits of using tax havens.
2. Minimize the financial tax
“By using solutions that offer Law Firm vault can find big savings on tax liabilities. For some types of transactions, we are able to offer a complete elimination of the income tax. “- This is advertising one of the law firms offering legal benefits havens.
I belong to admit that human nature is to avoid the excessive burden. Thus, each acting in favor of the company owner or manager (after all its statutory duty to take care of profitability of the company).
Of course it is criticized by politicians and officials behavior.
Confidentiality of data is the aspect most discussion. It can be used for money laundering. The concept of dirty money can cover both the profits of crime attributed to how the mafia and the revenue arising from corrupt activity.
4. Flexible formula business
Many tax havens are world leaders in the development of specific forms of commercial law.
Tax havens are often extremely sophisticated and well thought out, offers a very flexible formulas activities that are unknown and impossible for companies registered under the Commercial Companies Code (eg. The opportunity to sit in the corporate board of directors, the possibility of having general meetings outside the country, the possibility of relocation to other jurisdiction).
There are also some type of legal persons unknown to the law of other countries, including Polish, which offer investors very interesting possibilities (eg. For example. Fundación de Interest Privado Panamanian law, Stichting Particulier Fonds Netherlands Antilles law or which is an intermediate form between the company and foundation Nevis Multiform Foundation law).
Legislation of offshore financial centers is developed with that in mind that the majority of customers interested in using his opportunities will come from abroad. Therefore, the rules governing the operation of similar corporate structures are very flexible and user-friendly.
Consequently, despite the large geographical distance, the structure of the client is easy to manage and maintain it requires him no more formality than to keep company with limited liability in Poland.
Position of tax havens in international law and national law
Are the so-called tax havens. “Harmful tax competition”. Hence, action to reduce the effects of their actions.
Hence, the first regulations “anti-havens” appeared quite quickly, as early as 1998 in a report entitled “Harmful tax competition: Emerging global phenomenon” (ang. Harmful Tax Competition: An Emerging Global Issue) .cel report was initiated action to counteract harmful tax competition.
According to the OECD promotes stratification of the above phenomenon of global dimensions taxes, causing the forced transfer of capital and increases the cost of the Member States to protect their own fiscal interests.
Report an obligation imposed adjustment of the current fiscal system to set standards by eliminating harmful tax regulations. Further consequences of the report was to identify tax havens among countries outside the OECD, and most importantly, “inviting them to work together to coordinate joint tasks”.
Black list of Polish Ministry of Finance
Polish Ministry of Finance publishes – under the Income Tax Act – art. 9a, par. 6 – a list of countries engaged in harmful tax competition.
The most widely treated as tax havens group of countries are listed:
1) The Principality of Andorra;
2) Anguilla – Overseas Territory of the United Kingdom of Great Britain and Northern Ireland;
3) Antigua and Barbuda;
4) Aruba – The territory of the Kingdom of the Netherlands;
5) The Commonwealth of the Bahamas;
6) The Kingdom of Bahrain;
9) Bermuda – Overseas Territory of the United Kingdom of Great Britain and Northern Ireland;
10) British Virgin Islands – Overseas Territory of the United Kingdom of Great Britain and Northern Ireland;
11) Cook Islands – Self-governing territory in association with New Zealand;
12) The Commonwealth of Dominica;
13) Gibraltar -Terytorium Overseas British Crown;
15) Guernsey / Sark / Alderney – dependent territories of the British Crown;
16) Hong Kong – Special Administrative Region of the People’s Republic of China;
17) Jersey – dependent territory of the British Crown;
18) Cayman Islands – Overseas Territory of the United Kingdom of Great Britain and Northern Ireland;
19) The Republic of Liberia;
20) The Principality of Liechtenstein;
21) Macau – Special Administrative Region of the People’s Republic of China;
22) The Republic of Maldives;
23) Isle of Man – dependent territory of the British Crown;
24) The Republic of the Marshall Islands;
25) The Republic of Mauritius;
26) The Principality of Monaco;
27) Montserrat – Overseas Territory of the United Kingdom of Great Britain and Northern Ireland;
28) The Republic of Nauru;
29) Netherlands Antilles – territory of the Kingdom of the Netherlands;
30) Niue – Self-governing territory in association with New Zealand;
31) The Republic of Panama;
32) the Independent State of Samoa;
33) The Republic of Seychelles;
34) The Federation of Sant Christopher and Nevis;
35) St. Lucia;
36) Saint Vincent and the Grenadines;
37) The Kingdom of Tonga;
38) Turks and Caicos Islands – Overseas Territory of the United Kingdom of Great Britain and Northern Ireland;
39) US Virgin Islands – an unincorporated territory of the United States;
40) The Republic of Vanuatu.