Lately it is very fashionable to argue that you can have money in a tax haven and not violate any type of tax law. This statement in itself is a falsehood, taking into account the definition of tax haven itself and the usual motivations that lead to this decision.
Four key factors are those used to determine if a jurisdiction is a tax haven:
1- If the jurisdiction does not impose taxes or these are only nominal. The GFIC recognizes that each jurisdiction has the right to determine whether it imposes direct taxes. If there are no direct but indirect taxes, the other three factors are used to determine if a jurisdiction is a tax haven.
2- If there is a lack of transparency. The informative opacity I would say is the main characteristic of a tax haven, since it is the one that allows us to have the confidence of not declaring without being discovered.
3 – If the laws or administrative practices do not allow the exchange of information for tax purposes with other countries in relation to taxpayers who benefit from low taxes.
4- If non-residents are allowed to benefit from tax breaks, even if they do not effectively develop an activity in the country.
The usual reasons for depositing money in a tax haven are the following:
A- Origin of doubtful legality of the money in question, not to mention that it usually comes from criminal acts (corruption, drugs, or submerged economy). It may even be the case that the money is obtained legally but is intended to avoid future taxation in the country of origin.
B- Intention to avoid the treasury or pay much less taxes without the need to reside in the tax haven itself. Normally he who goes to tax havens carries a significant amount of money; taking into account the Spanish tax system it would not make much sense to send a tax haven less $ 100,000, and even less if it has been obtained legally.
What taxes are usually tried to avoid or reduce in a tax haven? Fundamentally the direct ones: personal income tax, donations and successions, societies, patrimony, etc.
That none of you would think of taking $ 1000 to a tax haven?
The question that politicians in all the countries of the world have to answer to us is how they are not able to eliminate these tax havens knowing that they imply a significant loss of tax revenue in all countries . The answer I imagine many of you know: unfortunately those who govern do so in theory for everyone but especially for them.
It is said that at least a quarter of the world’s wealth is deposited or managed from tax havens.
If I told you that today Switzerland the GFIC does not consider it a safe tax haven that many of you would be surprised, just as it has happened to me.