Samuel OskysIt is estimated that the U.S. alone loses around $70-100 billion in tax revenue every year from large corporate companies and wealthy individuals who move their profits behind shell companies based in popular offshore havens.
Offshore schemes exposed
Documents such as Swiss Leaks, Paradise Papers and what is considered as the world’s biggest data leak in history, Panama Papers, have brought to light millions of confidential documents exposing tax avoidance schemes such as:
- Foreign trusts
- Foreign corporations
- Foreign (offshore) partnerships, LLCs and LLPs
- International Business Companies (IBCs)
- Offshore private annuities
- Private banking
- Personal investment companies
- Captive insurance companies
- Offshore bank accounts and credit cards
- Related-party loans
In these schemes, the world’s elite exploits secrecy laws of offshore jurisdictions in order to hide assets subject to taxation.
Popular tax havens offer reduced or zero income tax rates and easily accessible bank accounts. These bank accounts are usually combined with shell company formations to insure anonymity. These territories implement tough laws that will not reveal the beneficial owner.
Popular tax havens
Businesses and high net worth individuals have plenty of choices since several countries promote themselves as tax havens however, the most popular ones are in the Caribbean and Europe regions.
Some of Europe’s top tax havens include Luxembourg, Netherlands, Ireland, Switzerland and Germany.
Asia’s tax-friendly countries are Hong Kong and Singapore.
Tropical paradises such as Bermuda, Bahamas, British Virgin Island, Puerto Rico and the Cayman Islands are also included in the top of the tax havens list.
Despite governments’ efforts to avoid tax evasion and give incentives to stop the transfer of profits, an estimated 10% of the world’s GDP is held in offshore banks.
