Top 5 Tax Havens In The World: Where most of us are already annoyed by the mere thought of paying income taxes, have you ever wondered how super-rich people avoid taxes legally? They park their money in tax-haven countries where it’s easy to evade taxes.
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What’s a Tax Haven?
Tax haven have been known to have extremely low or zero taxes compared to what you’d pay in your own country. They are also known as Global Black Holes, as these places suck in untaxed money from around the world.
But how do these tax-free countries make money? It’s simple—they have other sources of revenue.
Some don’t require residency and may promise not to share info with your home country. Even though tax havens are often linked to illegal activity, they can also be used legally to cut down on individual or company taxes.
So, what are some major tax havens in the world? Keep reading to find out!
Top 5 Tax Havens In The World
The Arab nation in the Persian Gulf doesn’t make its citizens pay income tax. It receives a lot of wealth and generates revenues from its oil industry and from extracting and refining fossil fuels.
There are no taxes on things like estates, sales, or capital gains. However, businesses in the oil and gas sector face high taxes. Even though there’s no corporate or income tax, the country does require Social Insurance contributions.
Bermuda takes privacy and confidentiality for bankers very seriously, making it one of the best places in the world for that.
No income tax and a 0% tax rate make the island more beautiful and great for investors and those wanting an offshore location.
Plus, there are no VAT, corporate income taxes, or sales taxes. And here’s another perk—employers don’t have to pay a payroll tax.
Luxembourg, a small European country, is one of the world’s richest nations, mainly because of its financial sector, which contributes over 35% to its GDP. It has been known as a top choice for a tax haven.
The country offers advantages to foreign individuals and businesses, like tax incentives and 0% withholding taxes.
In the Bahamas, residents don’t have to pay income tax, no matter where their income comes from.
You don’t need citizenship to enjoy a tax-free life, but permanent residents must spend at least 90 days in the country, and expatriates must own a residence for a minimum of 10 years.
Bahamian citizens are free from taxes on income, capital gains, inheritance, and gifts. Instead, the government relies on VAT and stamp tax for its expenses, and illegal financial activities like money laundering are strictly prohibited. The government’s main revenue comes from the tourism and offshore sectors.
V. Cayman Islands
A British overseas territory in the Caribbean is a popular choice for businesses and financiers.
Foreign individuals get several benefits, including no personal income, capital gains, withholding, payroll, or corporate taxes, and the country doesn’t withhold taxes on foreign entities as well.
However, living here can be expensive, and you need a substantial sum for long-term residency. Similar to the Bahamas, tourism in the Cayman Islands generates enough revenue for the government without taxing residents.
There are additional tax haven countries like the Netherlands, Switzerland, Mauritius, Singapore, and others that offer tax benefits for those seeking to save on taxes.
Taxpayers should be careful, considering the actions taken against tax evaders in some countries.
Do you know of any other Tax Haven countries?
Written By Shivani Singh
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