Tax Havens

Going Offshore to Avoid the Tax Man’s Grabby Mitts

Tax havens are at the center of the murky world of offshore finance, where the wealthy, the paranoid and sometimes the downright shady can shelter their income and assets from the grabby hands of tax collectors. Taxpayers are drawn to tax havens for a variety of reasons. By setting up shop in the Cayman Islands, the Isle of Man, Liechtenstein or Dubai – to name just a few tax havens – rich individuals and corporations can lower their tax burdens. Because of their secrecy, tax havens tend to attract shadowy characters who hope to accomplish more than simply skirting the tax man. Tax havens also offer an escape from regulation; they can be hotbeds for laundering money and for stashing cash away from nosy spouses and prying partners. Countries that set up tax havens, for their part, use their sovereign status as a way to lure in the elite’s capital. Yet the existence of these centers exacerbates the uneven fiscal responsibilities globalization has magnified: When corporations and the affluent don’t pay their fair share of taxes, the rest of the world suffers the inequity.

Tax havens can create some surreal scenarios: ...