Question

1. Give a recent example and explain the reasoning for any criticism it received for using a tax haven. What was the firm’s rationale for doing so?

Answer 1

Tax haven

Tax haven countries are those country that offers a low rate or even a nil tax liability to foreign person or businesses.

Such countries promotes the foreign nations to come in their country and set up a business or even promotes them to keep their money in their countries and enjoy the benefit of nil tax rate and earn huge incomes.

Criticism

Such tax haven countries are critised because they does not release any information about the persons who are holding business or money to the foreign government

This way the origin country loosed much in taxes

Such countries enable the benefits to enjoy nil rate of tax, this way they promotes the foreign nations people to transfer the money from the country to the tax heaven countries banks.

This enables the tax heaven countries to enjoy the benefit of increase money In their financial institutions.

Such tax heaven countries leads to a leakage in the income of the tax authorities of the origin country because they does not leak any information about the assets the foreign national holds in there country.