The tax havens between measures of economic stimulation and measures against tax evasion
| Author | Adrian Constantin Manea |
| Position | Department of Private Law, <I>Transilvania</I> University of Braşov. |
| Pages | 223-228 |
Page 223
In everyday language, there are defined as tax havens, those territories or countries that offer a wide range of laws adopted for tax advantages of offshore companies registered as resident in that territory. Terminologically speaking, the Romanian translation of the concept of tax haven from English - tax haven - leads us to the phrase tax shelter.
Tax havens are provided by legislation, which is passed in order to stimulate economic favorable tax conditions, ranging from reduced rates of tax to zero tax, accounting formality and flexibility over the registration of companies, all translating into a well-organized legislative mechanism, which supports the organization and operation of companies in the country. Just like not paying tax or the failure to submit annual balance sheet do not violate the tax law and finance, but on the contrary, the company is applying the law to offshore partial or total exemption from paying taxes, which takes the form of avoidance tax law.
This form of tax evasion under the letter of the law must not be framed as a means of tax fraud; tax fraud occurs because of financial and criminal penalties, while the legal benefits of taxpayers who use tax havens are not sanctioned in any way.
In general, the conceptual approaches of of tax haven data are limited to declaring those tax haven countries with low taxes, but this approach does not supply the legal advantages provided by the tax system in these territories. Although there is no general definition of the term tax haven, we believe that Roger Brown's conceptual approach is the best approach to the facts existing in those territories " it is called a tax haven the territory where individuals or companies have the impression of being required less than elsewhere."Page 224
If we make reference to international instruments for the analysis of tax havens, we find it to be eloquently presented in the report by Richard Gordon at the request of Congress entitled "The Gordon Report, Tax Havens and Their Uses by Tax Payers from United States - An Overview". According to the report, "tax haven is any country with tax rates of zero or very low on some categories of income and provides a certain level of banking or commercial secrecy" [1].
The definition given in this report does not fully cover contemporary facts, because by this definition there are recognized only those countries with a permissive and minimal tax law, as tax havens, while other territorial units are excluded from the definition. In this sense, there are illustrated some countries that have territorial units within the country known as tax havens such as the United States - Delaware, Nevada, Wyoming or- cantons in Switzerland: Neufchatel, Freiberg, and Zug.
Research group C. Bişa, I. Costea, B. Dancău, have extended the tax paradise considering that tax havens "are areas that provide a suite of tax advantages of offshore companies registered in those jurisdictions" [2].
Another report which examines the contemporary essence of the issue in light of the tax havens of tax evasion is "Report from the Government Commission on Capital Flight from Poor Countries" in which we find a precise definition of the term, but we find generally recognized criteria specific as tax havens: a combination of privacy and zero fees [3].
Based on the concepts of legal and illegal tax evasion, the tax havens classification category of tax fraud is exaggerated because if within tax havens practically the taxpayer merely observes the tax law without incurring legal sanctions, if not for that mistake they argue that the tax haven is a tool, an instrument through which the international tax evasion is used by taxpayers seeking a more advanced tax treatment.
1) First, these legal entities offer substantial tax advantages compared with other legal entities, for the companies that shall be registered within the office, or individuals residing in their territory, through legislative rules. The purpose of these facilities is economic: to attract growing companies, raising capital and fostering the emergence of activities necessary to ensure economic and social balance. The tax incentives used to achieve the goal are many tax deductions based on income or profits taxable by the application of extremely low rates, benefits that can be...
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