European+Tax+Havens

There are many states and places in Europe that fit easily the definition of [|tax haven]. Tax havens offer minimal or zero taxes together with very lax regulation and very high secrecy. Other common terms to tax haven are secrecy jurisdictions and offshore jurisdictions. In Europe under this category of tax haven fall at least Andorra, Austria, Channel Islands, Cyprus, England, Germany, Gibraltar, Ireland, Isle of Man, Luxemburg, Malta, Monaco, Netherland and Switzerland. According to some sources, Latvia when joining the Euro-zone in the beginning of the year 2014, will become a new European tax haven.

 **Tax Havens and European Union**
 EU evaluates that it looses around 1 trillion euros of potential tax revenue to tax fraud, tax evasion, tax avoidance and aggressive tax planning every year. Therefore it has launched an 30-point action plan to fight against tax havens and tax avoidance.

**European Tax Havens by Country**
 **Andorra**  Andorra is a small state in Pyrenees, in between Spain and France, that is not part of EU. It has quite high level of secrecy and is lucrative especially those companies and citizens of the two big neighbouring countries.

 **Austria**  Austria has a guaranteed banking secrecy. There is no inheritance tax and it is possible to avoid property tax through private foundations where beneficiaries can remain anonymous. Lately there has been lot of pressure towards Austria to share the bank account information with other EU member states.

 **The Channel Islands**  The Channel Islands consists of the Islands of Jersey, Guernsey and Sark. These islands there are more companies (mainly financial institutions and insurance companies) The companies are drawn here due the low taxes and high level of secrecy (through a system called “self-protected companies”). These islands offer 20 percent income tax, but the wealthy can often negotiate much lower tax rates or devise schemes to avoid any contributions. There is no inheritanc or capital gains tax and a full tax relief is offered on mortgage and other loans.

 **Cyprus**  With Cyprus the situation has changed because of the EU/IMF bailout. Before that the banking sector of these small country was huge. With its low corporate income tax, inadequate auditing requirements and possibility to have anonymous accounts and it was said to be "gateway for money laundering activities in the EU”. The situation and future is yet to been seen.

 **England**  Many might be surprised to see England in this list but London city provides the possibility for world’s largest tax evasion practise. As the city is independent from the Crown there is a free flow of money between it and the former British territories, which themselves are tax havens such as Jersey of Cayman Islands.

 **Germany**  Germany is ranked ninth in the world for financial secrecy, according to Tax Justice Network.Germany offers anonymity for foreign direct investors and they are not required to pay taxes on interest.

<span style="font-family: verdana,arial,helvetica,sans-serif; font-size: 12px; line-height: 18px;"> **Gibraltar** <span style="font-family: verdana,arial,helvetica,sans-serif; font-size: 12px; line-height: 18px;"> Gibraltar is the home of letterbox companies that are called “trusts”, which do not have real owner but are layered many times to hide illegal action such as money laundering and gambling.

<span style="font-family: verdana,arial,helvetica,sans-serif; font-size: 12px; line-height: 18px;"> **Ireland** <span style="font-family: verdana,arial,helvetica,sans-serif; font-size: 12px; line-height: 18px;"> Ireland with its low corporation tax (12,5%) has attracted lots of MNCs but also criticism. There have been even suspicion of MNCs exempting these taxes altogether. A dispute is going on between EU countries but also between Ireland and US.

<span style="font-family: verdana,arial,helvetica,sans-serif; font-size: 12px; line-height: 18px;"> **Isle of Man** <span style="font-family: verdana,arial,helvetica,sans-serif; font-size: 12px; line-height: 18px;"> Isle of Man is self-governing Crown Dependancy of British Crown. It has no capital gains tax, corporation tax, wealth tax, stamp duty or inheritance tax and only a 20 percent top rate of income tax. So obviously it has been very attractive place for people and companies avoiding tax-paying. Though, this might be changing as it has recently agreed to open up and share information about it’s taxpayers with Britain, France, Germany, Italy and Spain.

<span style="font-family: verdana,arial,helvetica,sans-serif; font-size: 12px; line-height: 18px;"> **Luxembourg** <span style="font-family: verdana,arial,helvetica,sans-serif; font-size: 12px; line-height: 18px;"> Luxemburg has offered a high level of banking secrecy for year and it’s banking sector is 22 times the amount of its own economy. But as for many other tax havens there has been some changes recently and they have agreed to give up the secrecy for EU citizens in 2015.

<span style="font-family: verdana,arial,helvetica,sans-serif; font-size: 12px; line-height: 18px;"> **Malta** <span style="font-family: verdana,arial,helvetica,sans-serif; font-size: 12px; line-height: 18px;"> Malta has low tax rates and the taxes that companies have to pay they get mostly refunded, so it has been very lucrative for foreign companies to earn higher profit.

<span style="font-family: verdana,arial,helvetica,sans-serif; font-size: 12px; line-height: 18px;"> **Monaco** <span style="font-family: verdana,arial,helvetica,sans-serif; font-size: 12px; line-height: 18px;"> Monaco has no income tax or business tax for residents or companies. It has 20 per cent VAT and companies face a 33 per cent tax on profit unless they can show that three-quarters of it was generated within the state. Monaco is trying to change it’s image of tax haven, as do many other places.

<span style="font-family: verdana,arial,helvetica,sans-serif; font-size: 12px; line-height: 18px;"> **Netherlands** <span style="font-family: verdana,arial,helvetica,sans-serif; font-size: 12px; line-height: 18px;"> Netherland offers companies tax breaks and treaties that makes it possible to move money directly though dutch banks to tax havens. The result of this tax avoidance favouring system is seen in that there are more than 400 U.S. companies that have their European headquarters in the Netherlands.

<span style="font-family: verdana,arial,helvetica,sans-serif; font-size: 12px; line-height: 18px;"> **Switzerland** <span style="font-family: verdana,arial,helvetica,sans-serif; font-size: 12px; line-height: 18px;"> Switzerland is one of the most well-known and well-established tax havens in the world. The Swiss laws prohibit bankers from releasing details about their clients, which has led to many prominent leaders to hide their wealth in Swiss banks. <span style="font-family: verdana,arial,helvetica,sans-serif; font-size: 12px; line-height: 18px;">