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A tax haven is a term, often used pejoratively, to describe a place with very low tax rates for non-domiciled investors, even if the official rates may be higher. In some older definitions, a tax haven also offers financial secrecy. However, while countries with high levels of secrecy but also high rates of taxation, most notably the United States and Germany in the Financial Secrecy Index ("FSI") rankings, can be featured in some tax haven lists, they are often omitted from lists for political reasons or through lack of subject matter knowledge. In contrast, countries with lower levels of secrecy but also low "effective" rates of taxation, most notably Ireland in the FSI rankings, appear in most § Tax haven lists. The consensus on effective tax rates has led academics to note that the term "tax haven" and "offshore financial centre" are almost synonymous. In reality, many offshore financial centers do not have harmful tax practices and are at the forefront among financial centers regarding AML practices and international tax reporting. Developments over the past decade have substantially reduced the ability for individuals or corporations to use tax havens for tax evasion (illegal non-payment of taxes owed). These include the end of banking secrecy in many jurisdictions including Switzerland following the passing of the US Foreign Account Tax Compliance Act and the adoption of the CRS (developed by the OECD). Traditional tax havens, like Jersey, are open about zero rates of taxation – as a consequence they have few bilateral tax treaties. Modern corporate tax havens have non-zero "headline" rates of taxation and high levels of OECD compliance, and thus have large networks of bilateral tax treaties. However, their base erosion and profit shifting ("BEPS") tools enable corporates to achieve "effective" tax rates closer to zero, not just in the haven but in all countries with which the haven has tax treaties; putting them on tax haven lists. According to modern studies, the § Top 10 tax havens include corporate-focused havens like the Netherlands, Singapore, Ireland, and the U.K., while Luxembourg, Hong Kong, the Cayman Islands, Bermuda, the British Virgin Islands, and Switzerland feature as both major traditional tax havens and major corporate tax havens. Corporate tax havens often serve as "conduits" to traditional tax havens. Use of tax havens results in a loss of tax revenues to countries which are not tax havens. Estimates of the § Financial scale of taxes avoided vary, but the most credible have a range of US$100–250 billion per annum. In addition, capital held in tax havens can permanently leave the tax base (base erosion). Estimates of capital held in tax havens also vary: the most credible estimates are between US$7–10 trillion (up to 10% of global assets). The harm of traditional and corporate tax havens has been particularly noted in developing nations, where the tax revenues are needed to build infrastructure. Over 15% of countries are sometimes labelled tax havens. Tax havens are mostly successful and well-governed economies, and being a haven has brought prosperity. The top 10–15 GDP-per-capita countries, excluding oil and gas exporters, are tax havens. Because of § Inflated GDP-per-capita (due to accounting BEPS flows), havens are prone to over-leverage (international capital misprice the artificial debt-to-GDP). This can lead to severe credit cycles and/or property/banking crises when international capital flows are repriced. Ireland's Celtic Tiger, and the subsequent financial crisis in 2009–13, is an example. Jersey is another. Research shows § U.S. as the largest beneficiary, and use of tax havens by U.S corporates maximised U.S. exchequer receipts. Historical focus on combating tax havens (e.g. OECD–IMF projects) had been on common standards, transparency and data sharing. The rise of OECD-compliant corporate tax havens, whose BEPS tools were responsible for most of the lost taxes, led to criticism of this approach, versus actual taxes paid. Higher-tax jurisdictions, such as the United States and many member states of the European Union, departed from the OECD BEPS Project in 2017–18 to introduce anti-BEPS tax regimes, targeted raising net taxes paid by corporations in corporate tax havens (e.g. the U.S. Tax Cuts and Jobs Act of 2017 ("TCJA") GILTI–BEAT–FDII tax regimes and move to a hybrid "territorial" tax system, and proposed EU Digital Services Tax regime, and EU Common Consolidated Corporate Tax Base). History Overview While areas of low taxation are recorded in Ancient Greece, tax academics identify what we know as tax havens as being a modern phenomenon, and note the following phases in their development: 19th century New Jersey and Delaware Corporations. In the 1880s, New Jersey was in financial difficulty and the Governor, Leon Abbett, backed a plan by a New York lawyer, Mr. Dill, to create a more liberal regime for establishing corporate structures, including availability "off-the-shelf companies" (but not non-resident companies). Delaware followed with the General Incorporation Act in 1898, on the basis of lobbying from other New York lawyers. Because of the restrictive incorporation regime in the Anglo-Saxon world as a result of the South Sea Bubble, New Jersey and Delaware were successful, and though not explicitly tax havens (e.g. US Federal and State taxes applied), many future tax havens would copy their "liberal" incorporation regimes. Post World War I. The modern concept of a tax haven is generally accepted to have emerged at an uncertain point in the immediate aftermath of World War I. Bermuda sometimes claims to have been the first tax haven based upon the creation of the first offshore companies legislation in 1935 by the newly created law firm of Conyers Dill & Pearman. However, most tax academics identify the Zurich-Zug-Liechtenstein triangle as the first "tax haven hub" created during the mid-1920s. Liechtenstein's 1924 Civil Code created the infamous Anstalt corporate vehicle, while Zurich and Zug developed the Aktiengesellschaft/Societé Anonyme and other brass plate companies. Tax academic Ronen Palan identifies two of the three major groups of tax havens, as emerging during this period: British Empire-based tax havens. The 1929 court case of Egyptian Delta Land and Investment Co. Ltd. V. Todd in Britain created the "non-resident corporation" and recognised a British-registered company with no business activities in Britain is not liable to British taxation. Tax academic Sol Picciotto noted the creation of such "non-resident" companies was "a loophole which, in a sense, made Britain a tax haven". The ruling applied to the British Empire, including Bermuda, Barbados, and the Cayman Islands. European-based tax havens. The Zurich-Zug-Liechtenstein triangle expanded and was joined by Luxembourg in 1929 when they created tax-free holding companies. However, in 1934, as a reaction to the global depression, the Swiss Ba.... Discover the Haven Francis popular books. Find the top 100 most popular Haven Francis books.