Question

1. What are tax havens? Explain the criteria we often us to classify a host country as a tax haven.

Answer 1

Tax havens are offshore countries which offers foreign investors and businesses very little or no tax liability in a politically and economically static business environment.

The basic criteria for a host country to be classify as a tax haven are-

• very little or no income taxes.
• minimal reporting of information
• lack of transparency obligations
• lack of local presence requirements
• marketing of tax haven vehicles

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