France Places Costa
Rica On List Of Tax Havens
France has drawn up its own list of 18
states it sees as tax havens and plans to
impose punitive taxes on French companies
which have a presence there, according to
documents seen by AFP on Monday.
Costa Rica is on the in the list of
'uncooperative' countries finalized last
week, according to a government order.
The list, which includes states that figure
on an OECD list of countries that have yet
to implement internationally agreed tax
standards, was decided under France's 2009
budget law adopted in December.
Paris plans to tax at 50 per cent - compared
to the current maximum of 33 per cent -
dividends, interest and license fees paid by
French firms to people or other firms
domiciled in tax havens, according to the
document.
The tax list by the Paris-based Organization
for Economic Cooperation and Development
(OECD) has three categories, with countries
put in the bottom category as a means to
shame them into making changes.
The so-called 'grey' category is in the
middle and includes territories that have
committed to standards set by the OECD on
the exchange of tax information, but which
have not yet fully implemented the 12
agreements needed to move to the top
category.
The Costa Rican government signed an
agreement last July saying it would take
steps to ensure the free exchange of
financial information. However, the
agreement has failed ratification by the
country's legislators.
The French list of tax havens include:
Chile, Uruguay, Guatemala, Philippines,
Costa Rica, Panama, Liberia, Brunei,
Belize and several islands in the Antilles
and in the Pacific area.
A tax haven is a country or territory where
certain taxes are levied at a low rate or
not at all.
Individuals and/or corporate entities can
find it attractive to move themselves to
areas with reduced or nil taxation levels.
This creates a situation of tax competition
among governments. Different jurisdictions
tend to be havens for different types of
taxes, and for different categories of
people and/or companies.
he Organization for Economic Co-operation
and Development (OECD) identifies three key
factors in considering whether a
jurisdiction is a tax haven:
1. Nil or only nominal taxes. Tax
havens impose nil or only nominal taxes
(generally or in special circumstances) and
offer themselves, or are perceived to offer
themselves, as a place to be used by
non-residents to escape high taxes in their
country of residence.
2. Protection of personal financial
information. Tax havens typically have
laws or administrative practices under which
businesses and individuals can benefit from
strict rules and other protections against
scrutiny by foreign tax authorities. This
prevents the transmittance of information
about taxpayers who are benefiting from the
low tax jurisdiction.
3. Lack of transparency. A lack of
transparency in the operation of the
legislative, legal or administrative
provisions is another factor used to
identify tax havens. The OECD is concerned
that laws should be applied openly and
consistently, and that information needed by
foreign tax authorities to determine a
taxpayer’s situation is available. Lack of
transparency in one country can make it
difficult, if not impossible, for other tax
authorities to apply their laws effectively.
‘Secret rulings’, negotiated tax rates, or
other practices that fail to apply the law
openly and consistently are examples of a
lack of transparency. Limited regulatory
supervision or a government’s lack of legal
access to financial records are contributing
factors.
However the OECD found that its definition
caught certain aspects of its members' tax
systems (some countries have low or zero
taxes for certain favored groups). Its later
work has therefore focused on the single
aspect of information exchange. This is
generally thought to be an inadequate
definition of a tax haven, but is
politically expedient because it includes
the small tax havens (with little power in
the international political arena) but
exempts the powerful countries with tax
haven aspects such as the USA and UK.[
In deciding whether or not a jurisdiction is
a tax haven, the first factor to look at is
whether there are no or nominal taxes. If
this is the case, the other two factors –
whether or not there is an exchange of
information and transparency – must be
analyzed.
Having no or nominal taxes is not
sufficient, by itself, to characterize a
jurisdiction as a tax haven.
The OECD recognizes that every jurisdiction
has a right to determine whether to impose
direct taxes and, if so, to determine the
appropriate tax rate.
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Tax rates around the world
From Wikipedia, the free encyclopedia
The U.S. National Bureau of Economic Research has suggested that roughly 15% of countries in the world are tax havens, that these countries tend to be small and affluent, and that better governed and regulated countries are more likely to become tax havens, and are more likely to be successful if they become tax havens |
