Tax haven
A tax haven is a jurisdiction that charges low or zero corporate tax and attracts multinational profit while asking for little or no genuine economic activity in return. Classic corporate havens such as Bermuda, the Cayman Islands and the British Virgin Islands levy zero corporate income tax. The Tax Justice Network's Corporate Tax Haven Index ranks the biggest enablers by combining a haven score (how much tax abuse the law permits) with the volume of corporate financial flows; in the October 2024 edition the top five are the British Virgin Islands and the Cayman Islands, then Bermuda and Switzerland, which the index scores level at the top, and Singapore. Three of them, BVI, Cayman and Bermuda, are British Overseas Territories. The UK itself ranks 19th and the US 25th in that edition.
ByLoopholeKiln EditorialPublished
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Example: a tech group's worldwide patents sit in a zero-tax holding company, which charges royalties to the operating businesses in every country where the products actually sell.
Why it matters to a small business: you operate from one country and pay its full rate. You have no zero-tax holding company, and setting one up would cost more than it could ever save you on the profit of a small firm.