Financial Transactions and Tax Haven Countries There are various reasons why people place their money/assets in tax haven For the drug trafficker, financial privacy is an indispensable aid in concealing the profits made through this illicit activity. There are a number of tax haven countries that provide this aid, Switzerland is a good example. Switzerland has a long history of success as the world's greatest financial In their haste to achieve the same success, many countries have passed bank secrecy laws which exceed Switzerland's in their all-inclusiveness and in the severity of their penalties. Pure tax havens are countries having tax laws that exact little or no local tax and thereby permit accumulation of capital until it is returned to a higher tax nation. To some degree, every country is a tax haven. The United States can be considered a tax haven because it does not tax the interest earned by foreigners on the deposits they maintain the United States' banks. Pure tax havens exist because not every country has the same taxing ability or needs. In small, resource-deficient countries, higher tax rates are not efficient. It may therefore be more advantageous for those countries to levy little or no taxes on income, corporate profits, capital gains, dividends, etc. This would promote industrial development, or at least commercial/tourist growth to provide adequate jobs and incomes for its citizens. The following is a listing of some of the no-tax/low tax countries and a comparison table. |