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  • Writer's picturehalugano

Tax haven: what does it really mean?

When someone talks to you about a tax haven, what do you immediately imagine? A beautiful tropical island with lots of palm trees on the beach, drinking long drinks at all hours?

I'm sorry to disappoint you, but tax haven is a term often used improperly, especially by the media or governments to entice or scare. It all depends on the situation you find yourself in.

Each country has its own (legal) definition of tax haven, it is not true that only the countries included in the so-called black list are tax havens. There are countries with a very low level of taxation, with a high level of financial transparency, and they can still be considered tax havens, even if they are on the "white lists".

Tax havens, in any case, have as their objective to protect the anonymity of those who use them, not just to have a low tax regime. The combination of these two factors can make one country more attractive than another.

But what can anonymity refer to?

  1. Objective anonymity, if you intend to "hide" the type of business activity carried out (and therefore declare an activity that is not the real one) . Very often used for activities that are not very legal, or are subject to a high level of risk, including fiscal risk

  2. Subjective anonymity, if you intend to protect the privacy of the entrepreneur or person carrying out the activity, which must not necessarily be compared to wanting to hide illegal activities

There are three types of tax havens: banking, corporate and judicial, depending on the advantages that can be obtained.

Here are some examples of countries that can be considered "tax havens", each for different reasons (obviously there are many others, even closer to us than we imagine):< /p>

  1. The United States of America is a tax haven because it does not exchange financial information with other countries, or at least they say they do but in reality it's not that easy to get information.

  2. Austria is a tax haven because it still maintains banking secrecy.

  3. Switzerland is a tax haven for entrepreneurs who invoice figures above one million, and in some cantons the taxation is very advantageous even for lower figures .

  4. Cyprus is a tax haven as it is recognized as an excellent financial hub between the West and the East.

  5. Serbia is a tax haven for logistics and commercial trading activities.

  6. Hong Kong is a tax haven for e-commerce businesses.

  7. … and so on, I could list a long list of other countries with many disparate advantages both commercial and financial.

However, if you consult the black lists of European countries, it does not appear that these countries are registered on them today, why?

This is precisely because the concept of tax haven has unfortunately been distorted: it does not mean that these countries implement harmful tax competition, but simply that there are different rules which, if known and well managed and recommended, allow the entrepreneur to enjoy important benefits.

Then there are the horizons of tax havens in cyberspace: how are crypto currencies treated for tax purposes, given that anonymity is one of their prerogatives?

Affaire a suivre….


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