This seminar discusses tax havens and their problems and potential solutions. It begins by defining tax havens as countries that offer little to no tax liability and financial transparency to attract foreign businesses and individuals. It then lists several well-known tax havens and notes that some have signed agreements to provide more financial information to foreign governments. The presentation outlines the factors used to rank jurisdictions on the Financial Secrecy Index, and provides the top 10 rankings. It then discusses problems caused by tax havens, such as depriving governments of revenue, enabling criminal activity, and increasing inequality. Potential solutions proposed include country-by-country reporting of multinational taxes, unitary taxation, automatic information exchange, public registers of company owners, and

1. A Seminar on Tax Haven:
Problems and Solutions
Presented By
Bismay Mishra

2. Meaning of Tax Haven
A country that offers foreign individuals and businesses
little or no tax liability in a politically and economically
stable environment.
Tax havens also provide little or no financial information
to foreign tax authorities.
Individuals and businesses that do not reside a tax haven
can take advantage of these countries' tax regimes to
avoid paying taxes in their home countries.
Tax havens do not require that an individual reside in or a
business operate out of that country in order to benefit
from its tax policies.

3. Introduction
• Andorra, the Bahamas, Belize, Bermuda, the British Virgin
Islands, the Cayman Islands, the Channel Islands, the Cook
Islands, Hong Kong, the Isle of Man, Mauritius, Lichtenstein,
Monaco, Panama, Switzerland and St. Kitts and Nevis are all
considered tax havens.
• However, pressure from foreign governments that want to
collect all the tax revenue they believe they are entitled to has
caused some tax haven countries to sign Tax Information
Exchange Agreements (TIEAs) and Mutual Legal Assistance
Treaties (MLAT) that provide foreign governments with
formerly secret information about investors' offshore accounts.

4. What is Tax Haven?
Tax havens – also known as ‘secrecy jurisdictions’ or ‘offshore’ –
provide any of the following:
• Escape from tax (of course)
• Secrecy, in various forms
• Avoidance of financial regulations
• Avoidance of criminal laws
• Escape from other rules of society, such as inheritance or
corporate governance rules
Tax havens can be whole countries, dependencies of bigger
countries, or even areas within countries.

5. Financial Secrecy Index:- Factors
Considered
• Banking Secrecy
• Trusts and Foundations
Register
• Recorded Company
Ownership
• Published Company
Ownership
• Published Company
Accounts
• Country by Country
Reporting
• Fit for Information
Exchange
• Efficiency of Tax
Administration
• Avoids Promoting Tax
Evasion
• Harmful legal vehicles
• Anti Money
Laundering
• Automatic Information
Exchange
• Bilateral Treaties
• International
Transparency
Commitments
• International Judicial
Co-operation

6. FSI Ranking
RANK Jurisdiction FSI-Value4 Secrecy Score5
Global Scale
Weight6
1 Switzerland2 1,765.3 78 4.916
2 Luxembourg2 1,454.5 67 12.049
3 Hong Kong2 1,283.4 72 4.206
4 Cayman Islands1,2 1,233.6 70 4.694
5 Singapore2 1,216.9 70 4.280
6 USA2 1,213.0 58 22.586
7 Lebanon2 747.9 79 0.354
8 Germany2 738.3 59 4.326
9 Jersey1,2 591.7 75 0.263
10 Japan2 513.1 61 1.185
32 India 254.6 46 1.800

7. Problems
 Tax havens help rich people hide money that should be spent on
schools, hospitals, roads and other public services:- Switzerland is
not only one of the world’s biggest financial centres but also one
of the world’s largest tax havens; find out why the country took
first place on the 2011 Financial Secrecy Index.
• Tax havens force poor people to pay the taxes of the rich:- Learn
about SAB Miller, the brewing multinational whose transfer pricing
techniques are depriving countries of much needed tax revenue.
• Tax havens help criminals hide their loot:- This multi-billion dollar
Ponzi scheme orchestrated by infamous Wall Street financier Bernie
Madoff could not have happened without tax havens.

8. Problems (Contd.)
• Tax havens help dictators and their cronies plunder the
resources of developing countries:- Teodoro Nguema Obiang
used tax havens to exploit Equatorial Guinea’s natural resources.
Not a very nice man.
• Tax havens allow banks to dodge financial rules and
regulations:- Dublin – a magical city of “light touch regulation”,
which draws in money from far and wide and channels it
directly into the shadow banking system.
• Tax havens corrupt markets, concealing insider dealing and
supporting aggressive tax dodging by multinational companies:-
the epic corruption which destroyed Enron – and hundreds of
livelihoods – could not have happened without tax havens.

9. Problems (Contd.)
• Tax havens create a private world of secrecy, impunity and power for rich
elites:- The Alpine ‘offshore’ microstate of Liechtenstein hit the headlines
in early 2008 for harbouring the corrupt funds of hundreds of tax evaders.
• Tax havens widen the gap between rich and poor people:- Find out why the
rich-poor gap is greater in the United States than almost any other
developed nation.
• Tax havens make laws in secret which affect us all:- Following on from
point 8, find out why Delaware, “The First State”, is the best place to
escape tax in the world.
• Tax havens degrade our faith in democracy:- The City of London
Corporation. Local-government authority and massive offshore lobbying
body.

10. Solutions
• Country by country reporting:- Under
country by country reporting, the
multinationals would have to break
their information down by country of
operation – including in each tax haven
– so that citizens and authorities can
see what the corporations are doing in
their countries.
• Unitary tax:- This would involve taxing
multinational corporations according to
the real economic substance of where
they actually do business.

11. Solutions (Contd.)
• Automatic information exchange:-
Developing countries – and rich ones –
must get the information they need to
tax their wealthiest citizens properly.
• Disclosure of the real life, proper, final,
ultimate, ACTUAL owners of
companies:- Ensuring that every human
who has a stake in a corporate structure
– a 'true beneficial’ owner – has his or
her identify available on a searchable,
low-cost public register. And we should
slap severe sanctions on those havens
that don’t shape up.

12. Solution (Contd.)
• Making ‘wilful blindness’ a
criminal offence:- We can bring
hard penalties against the
pinstripe intermediaries who
help the tax evaders. The IMF
and other bodies dealing with
money-laundering must
officially make tax evasion a
money-laundering offence.

13. THANK YOU