May 13, 2015 – A corporate tax haven is defined as country that sets low taxes to encourage corporations to set up and use the countries resources. Corporate tax havens are well known for designing tax structures that are too tempting for organizations to ignore. The majority of tax havens include trade free zones that have zero taxation schemes for foreign companies incorporated in the jurisdiction.
Here we will look at 5 top corporate tax havens in the world that offer generous tax incentives and exemptions for offshore companies. We have based the ranking on PriceWaterCooper List of most tax friendly nations in the world. Countries listed below offer the highest level of financial secrecy, tax evasion and offshore accounts for the corporations.
U.A.E., the oil rich Arab country, is a mecca for corporations due to its lowest corporate tax rates and dozens of industrial trade free zones. Companies operating in the trade free zones are exempt from export and import duties. The companies do not have to pay capital gains tax and enjoy various other exemptions that allow them to keep their operational costs down and maximize their revenues.
Maldives is a small island nation with a big heart for foreign investors. With a tax rate of just 9.3% on property transfers and 0.1% on business registration fees, it is certainly a tax paradise for corporations. The corporate tax rate in Maldives is zero making it one of the most attractive destinations for corporations to set up their operations.
Singapore is increasingly becoming a popular tax haven destination for corporations. The country makes it easier for firms to file taxes through its efficient online payments system. Due to tax exemption schemes, the country’s effective tax rate is one of the lowest in the world. Companies with income below $100,000 are exempt from tax implications. Effective corporate tax rate begins at 4.25% with a maximum tax rate of just 16.74%.
Qatar is another oil rich Arab nation that is a popular destination for foreign corporations. The country boasts one of the lowest tax rates in the world. A flat corporate tax rate of 10% is levied on all profits made by foreign firms. There is not road tax, car tax, VAT, or license fee in Qatar.
Bahrain is a small oil rich island-country situated near the western shores of Persian Gulf. There is minimal taxation in Bahrain with no income tax. Those who owe properties do not have to pay any tax on their rental income. Capital gains are also not taxed in Bahrain and there is no system of filing taxes in the country. The country has one of the lowest Fiscal Secrecy Index scores in the world according to Tax Justice Network’s report.
All the above countries offer generous tax incentives to corporations and individuals. Most of the countries listed above generate revenues from oil and other natural resources so they are able to offer generous tax incentives to corporations.
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