Safe Haven

  

Categories: International, Tax

Isn’t that kind of redundant, repetitive? Like saying the same thing twice, the same thing twice? Like...aren’t all havens safe? Kinda like heaven, maybe, minus the “e”?

Go to a safe haven, and you’re immune to the sheriff trying to evict you fro your mortgage-belated home, or the mob coming after you for, well, you know.

Our thought: if you have to look for one, something very bad happened along the way. Maybe best to just move there and take up knitting.

Related or Semi-related Video

Finance: What is a tax haven?1 Views

00:00

Finance allah shmoop What is a tax haven Well it's

00:07

this kindly loving wonderful place just past the gates of

00:10

st peter you know maybe that's attacks heaven If you

00:13

tilt your telescope at just the right angle you'll see

00:16

the cayman islands of the bahamas You might see somalia

00:20

although it always seems to be storming therein And lately

00:23

you'll see ireland Yeah another tax haven Well how on

00:26

earth are all these countries linked Well they all offer

00:30

special tax incentives for corporations doing profitable business there such

00:35

that those corporations more or less pay little tax if

00:39

any Why was this even a thing Well in america

00:42

at least before trump became president there was a severe

00:45

hit against corporations who had divisions outside of the united

00:49

states selling printers or search links or purple leather handbags

00:53

for nine hundred ninety nine dollars each such that those

00:56

corporations were taxed once by the country in which they

01:00

did business Think france that was ah high tax rate

01:03

And then if those companies wanted to bring their cash

01:05

back to america to be held in an american bank

01:09

well then those companies were taxed again turning a dollar

01:13

Of profit into something like an thirty or forty cents

01:16

since it made no sense for companies to lose so

01:18

much hard earned profits so quickly to tax dollars Well

01:22

a mini industry in tax havens grew up all around

01:26

those unfair government dealings Well some of the schemes behind

01:29

these processes included something called a dutch sandwich and no

01:34

not the one with the raw hearing No in this

01:38

one the product is deemed as having been shipped by

01:41

an irish company but then booked or accounted for through

01:45

a shell or quays I fake company or holding company

01:49

in the netherlands sometimes remaining profits or then shipped to

01:52

the caymans or bermuda otherwise known as the bermuda black

01:55

hole Which leads the way for us to make a

01:57

joke here But we won't I say we do ever

02:00

strength There are three basic types of tax havens in

02:03

a dutch sandwich Primary tax havens Yeah those are the

02:07

ones with the shell corpse Then he have semi tax

02:10

havens where a country will produce goods for sale primarily

02:13

outside of their boundaries and have flexible regulations to encourage

02:17

you No job growth for themselves and third kind is

02:20

a conduit tax haven where income from sales mainly sales

02:24

made elsewhere is collected and then distributed back inside the

02:27

country Well over time the legal structure of tax havens

02:30

has shifted But in the new post obama era which

02:33

actively lowered corporate tax rates and defended american companies rights

02:38

to bring american cash back home to america While the

02:40

need for tax havens feels like it is slowly fading 00:02:43.803 --> [endTime] away But there's still more popular than tax heaven

Up Next

Finance: What are T-Notes, T-Bonds and TIPS?
18 Views

What are T-Notes, T-Bonds, and TIPS? T-Notes are debt securities (like bonds) that are issued by the government and mature within one to 10 years....

Find other enlightening terms in Shmoop Finance Genius Bar(f)