国际逃税与避税

第三节　国际逃税与避税

Section 3　International Tax Evasion and Avoidance

【The Fundamental】

A. An Overview of International Tax Evasion and Tax Avoidance

After World War , multinational corporations emerge and develop at an extraordinary Ⅱspeed. Domestic activities of tax evasion and avoidance find themselves another field. Tax evasion and avoidance thus tend to be more international. Convenient transportation and communication are all advantageous conditions for cross-border evasion and avoidance. In addition, the tax rate in some states keeps at a very high level for a long time, which is also an incentive for tax evasion and avoidance. The combination of such factors leads to more and more cross-border tax evasion and avoidance, which severely injure taxation benefits of states and disturb international taxation orders. Therefore, more and more states and international organizations pay great attention to this issue. This part shall discuss the definition, mode and solution of tax evasion and avoidance.

International tax evasion and avoidance is the extension and expansion of domestic tax evasion and avoidance.

1. Definitions of International Tax Evasion and Avoidance.

Tax evasion is a kind of international acts in violation of tax law committed by taxpayers for evading the obligation to make tax payment and such violations take the form of failure tomake full or part of the tax payment. Tax evasion is illegal, and severe tax evasion may even constitute a crime.

In a strict sense, tax evasion and tax avoidance are two kinds of separated activities, and different in respect of nature, methods and legal results.

In a narrow sense, tax evasion is taxpayer’s international and conscious violation of laws of the collecting state. In a broad sense, tax evasion also includes the failure to perform tax obligations due to negligence of taxpayers, who do not adopt any methods to conceal taxable incomes for purpose of tax evading.

Tax avoidance is a kind of practices adopted by taxpayers through the use of proper tax arrangements or planning to reduce their tax payable by taking advantage of loopholes and unclear provisions in the tax law, or unregulated methods. Tax avoidance is not a direct violation of law, and thus not a crime. Consultancy services in respect of tax avoidance scheme and tax planning^[20]for the avoidance of taxes has already developed by many law firms and accounting firms.

Although tax avoidance is immoral, it is not illegal. Methods to avoid tax are usually not prohibited by tax law. Activities of taxpayers to avoid tax are not fraudulent in nature.

The most important difference between tax evasion and tax avoidance is the legal result, as tax evasion is illegal. Therefore, if an investigation authority has substantiated tax evasion activities, relevant taxpayers shall be liable for such activities. According to the severity, liabilities include administrative, civil and criminal liabilities.

2. Main Devices of International Tax Evasion and Tax Avoidance.

Main devices of international tax evasion and tax avoidance are as following exhibition:

(a) Main Devices of Tax Evasion. Failure to Provide Tax-Related Information; Failure to file a retune^[21]; Failure to report all income or assets subject to tax; Misrepresentation^[22]of Items of Income; Improper characterization of a gift of property as a sale; Improper characterization of a gift of money as a loan; Improper characterization of fees, interests, or royalties as dividends; Improper characterization of the lease of equipment as a purchase; Misrepresentation of Items of Expense; Allocation of inflated head-office expenses to branches; Allocation of inflated parent-company expenses to subsidiaries; Charging inflated fees fortechnical assistance and special services; Overstatement of costs incurred in the implementation of turnkey projects; Material Concealment; Concealment of important or exported goods; Concealment of wealth; Concealment of transfer of money; Concealment through Falsification of Accounts; Preparation of separate accounts; False invoicing; Inclusion of personal expenditure in company accounts under overhead; Sales without invoicing; Invoicing without sales; Claiming false deductions; Flight of Taxpayers to another Country; Remuneration splitting; Misrepresentation that services were performed abroad; Disguising Remuneration; Disguising remuneration as reimbursement of expenses; Disguising perquisites^[23].

(b) Main Devices of Tax Avoidance. Transformation of Income; Transformation of ordinary income into capital gains; Transformation of capital gains into ordinary income; Transformation of payments for goods or services into interest-free or indefinite loans; Thin Capitalization^[24]; Use of high ratio of loans to equity to achieve a tax advantage; Use of investments in exchange for royalties or fees to achieve a tax advantage; Transfer of legal ownership while retaining beneficial ownership; Transfer of income or assets to a controlled company that is tax exempt; Transfer of income or assets to a controlled company subject to lower tax rates; Transfer Pricing^[25]; Transfer income to a branch or subsidiary in a low-tax country; Transfer income to a branch or subsidiary in a country with a double-tax treaty; Transfer income to a branch or subsidiary in a country with incentives or reliefs; Allocate expenses to a branch or subsidiary in a high-tax country.

B. Legal Solution of International Tax Evasion and Tax Avoidance

1. General Domestic Legal Measures to Regulate Tax Evasion and Tax Avoidance.

(1) Improving Taxation Declaration System.

Declaring incomes from foreign businesses is an obligation for taxpayers. The strictest form is that doing business overseas shall be approved by tax authorities in advance. For example, according to provisions of income tax law and corporate law of UK, if a taxpayer moves his/her residence in the UK to another state, or transfer domestic assets to anotherforeign corporations controlled by him/her, he/she shall get approval from the Treasury, otherwise he/she would be punished for the violation of law. In other words, such a taxpayer still is responsible to pay tax as in the situation of emigration.

In respect of procedural law, there are also special rules to regulate tax evasion and avoidance. For example, in respect of the burden of evidence, many states shift it to the taxpayers. In these states, it is the taxpayers’ burden to justify their legality, which is advantageous for tax authorities’ investigation. Taxpayers are constructed to be illegal if they cannot substantiate their acts. Generally, a taxpayer shall put forward evidences in these two aspects: evidences in respect of activities involved in foreign elements, and evidences in respect of arm’s length transactions in certain kinds of cross-border transactions. For example, the tax law of the US stipulates clearly that taxpayers bear the burden of evidence. Income tax law of Belgium and tax code of France provide that unless the taxpayer could substantiate otherwise, some payments, especially those made to tax heavens, are deemed as fabricated and cannot be deducted from the taxable amounts. Some states do not provide that taxpayers bear the burden of proof, but instead they provide that taxpayers are obligated to cooperate with taxation authorities in investigations and provide necessary documents.

(2) Strengthening the Accounting Review and Auditing System.

Accounting reviews and auditing is an important measure to monitor operation and transactions of international taxpayers. Many states provide in their tax laws that corporations, especially listing corporations, shall have accounts to their tax returns. There are sound accounting review rules in respect of tax statements in many developed states, such as the UK, the US, Canada and Japan. In some states, tax authorities require registered accountants to audit accounting statements of taxpayers in accordance with independent accounting standards; the audit report shall also be submitted. China provide in relevant laws that foreign investment enterprises shall have their accounting statements audited by China Registered Accountants^[26]prior to submission to relevant authorities subject to other provisions by the government.

(3) Intensifying Taxation Investigating.

Tax investigation could provide tax information to taxation authorities and help reveal tax evasion and tax avoidance; therefore it is an important supplementary measure to the tax declaration mechanism. Taxation investigation has been a focus of the US, especially inrespect of international tax evasion and tax avoidance. As a government agency, the Internal Revenue Service (IRS)^[27]has been equipped with 700 persons. IRS has also proposed to establish a research agency of international taxation to investigate foreign taxpayers in the US, US taxpayers in foreign states and operations, financial status and tax payments of foreign companies and non-residents.

International cooperation is of great importance in investigation. Confidentiality legislation is one of the obstacles for taxation investigation. However, in recent years, many states have made huge efforts to promote international cooperation.

(4) Establishing Income Assessment System.

In respect of those taxpayers who cannot provide accurate documents for relevant costs and expenses and thus cannot have their taxable income calculated in any precise manner, and those taxpayers whose taxes payable are very small in amounts, some states employ an assessment approach to determine their taxes. To some extent, such kind of assessment system is an effective method to regulate tax evasion and tax avoidance.

2. Special Domestic Legal Measures to Regulate Tax Evasion and Tax Avoidance.

(1) Measures to Regulate Tax Evasion and Tax Avoidance in respect of Natural Person.

a. Restricting Migration and Changing Residence for the Purpose of International Tax Avoidance.

The freedom of mobility from state to another is a basic principle of international law on human rights. It is a rule of international law that one state shall not restrict its national(citizens), residents and foreign immigrants from moving to foreign states. What is more, many states provide in their constitutions that individuals have the freedom to emigrate or move to foreign states. However, such a freedom could be taken advantage of in order to avoid tax.

In order to prevent the misuse of such a freedom, some states impose restrictions on this freedom. One restriction is that those having their taxes unpaid are prohibited from leaving the national border. Another restriction is that, as for those with evident intention of tax avoidance, although their migration and cross-border movement are not prohibited, they are still obligated to pay tax to their original resident state of nationality in a long time.

b. Strict and Impartial Migration Policies.

Some states adopt strict qualifications for migration and movement of natural persons,and thus to regulate international tax avoidance. These states do not grant approvals to those applicants that do not satisfy the statutory qualifications. For example, there is an unofficial rule of UK Treasury that in some circumstances a natural person emigrating or moving to another state would still keep his/her identity as a UK tax resident in three years after his/her departure.

(2) Measures to Regulate Tax Evasion and Tax Avoidance in Respect of Corporations.

a. Restricting Corporations’ Migration.

In recent years, in order to prevent corporations to avoid tax through migration, many states have restricted corporations’ migration. For example, since 1970s, UK has begin to provide in tax law that no corporation could abandon its identity and migrate to another state before getting an approval from the Treasury. Those violating such a rule would be penalized with a fine amounting to three times of taxes avoided, and persons responsible would be sentenced to imprisonment of two years.

b. Restricting Corporations’ Alienation of Business and Assets^[28].

Corporation migration is evident and easy to be fond and prevented by tax authorities of the resident state. In order to circumvent the investigation of tax authorities, some corporations have tried to avoid taxes in a much more secret way: transferring their main business and assets to a foreign state. The advantage of making such arrangements is that it has the same effect as migration, but it does not violate the rules of migration ostensibly. In order to regulate this, many states make some special provisions in tax law. For example, according to the UK law, unless approved by the Treasury in advance, no corporation could migrate to tax heavens, nor establish its subsidiaries in tax heavens, nor transfer part or all of its business to tax heavens. What’s more, the following shall also be approved by the Treasury: alienating business of a resident corporation to non-resident corporations, selling subsidiaries of the resident corporation to non-resident corporations.

c. Regulating Reorganization for the Purpose of Tax Avoidance.

Among cross-border economic activities, acquisition, merger,^[29]restructuring, reorganization and liquidation^[30]take place very frequently. At the same time, such activities may also be taken advantage of to avoid tax. States adopt strict rules to regulate such tax avoidances. Forexample, the US Internal Revenue Code^[31]provides clearly that, in respect of alienation of properties having foreign corporations taking part in, all capital gains from restructuring, reorganization and liquidation shall be taxed, unless the IRS determines that such an activity is not for the purpose of tax avoidance. In the UK, those corporations which are established after the merger of a UK resident and a non-resident corporation cannot enjoy the exemption of capital gain taxes that would be available to resident corporations.

d. Adopting the Rule of “Substance over Form”^[32].

Substance over form is a very important principle for judicial activities. This principle means that the legality of those activities shall be disregarded if such activities are lawful on their faces but are unlawful on their merits. This principle has also been adopted by many states in the field of taxation. These states do not recognize those arrangements and transactions that are lawful according to their forms but lack sufficient commercial justifications. The results of applying such a rule include that some corporate activities may be attributed to natural persons, which corporate incomes may be treated as personal incomes, and those transactions involving third parties may be treated as transactions between direct parties. In recent years, judicial institutions in the common law system are increasingly willing to recognize and apply such a principle, and thus increase the possibility for tax authorities to win the cases.

e. Regulation on the Abuse of Tax Heavens to Postponing Tax Payments.

The resistance of postponing tax payments finally drives the resident states to impose taxes on the earning of resident corporations from overseas corporations established by such resident corporations as shareholders in the tax heavens, whether in the form of dividends or not, according to their shares. The effect of such a deterrence force is not on establishing tax jurisdictions on corporations established in tax heavens, but on preventing resident shareholders from accumulating profits through the independent status of corporations in tax heavens by domestic taxation collection and administration.

3. Special Legal Measures to Regulate Tax Evasion and Tax Avoidance with regard to Multinational Enterprises.

(1) Prohibition on Over-use of Tax Heaven^[33].

Some states clearly provide in their laws that they would not recognize the legality of base companies in tax heavens if they do not conduct any actual transactions. According to French law, unless a French taxpayer could substantiate the authenticity of transactions, interests, royalties and service fees paid to base companies could not be deducted before tax. Under German Law a special tax shall be imposed on those migrating to tax heavens. Some states even extend such rules to foreign trust companies.

(2) Measures on Transfer Pricing.

Most states adopt the principle of arm’s length transaction^[34]to regulate transfer pricing among associated enterprises, and to prevent associated enterprises from transferring profits by manipulating contract prices and thus allocating profits among associated enterprises.

(3) Rules on off-shore Investment Funds.

Some states adopt rules on off-shore investment funds to prevent taxpayers from investing in foreign mutual funds or trustees to postpone the payment of domestic taxes.

(4) Anti-treaty Shopping Article.

Some states represented by the US insist on including in the tax agreements a limitation to prevent treaty shopping. The meaning of treaty shopping^[35]could be explained by the following example: a resident of state B choose to establish an entity in state A for the purpose of enjoying tax preferences under taxation agreements of state A which are unavailable because of his/her resident identity in state B.

(5) Rules on Anti-Thin Capitalization.

Thin capitalization means using more debts than equity in a corporation’s capital structure. In other words, it is using excessive loans to hide capital. The purpose of thin capitalization is to unreasonably increase the proportion of debts in the capital structure and thus to increase interests payment and reduce taxable amounts as a result. Its only purpose or main purpose is to harvest taxation benefits. Therefore, many states adopt rules on anti-thin capitalization to prevent non-resident shareholders of resident corporations from overusing loans to avoid tax.

(6) Rules on Realization of Capital Gains upon Expatriation.

Rules on realization of capital gains^[36]upon expatriation are adopted by many states. According to these rules, when property of a resident corporation is transferred to a non-resident associated corporation, such property is deemed as having been sold out at a fair market price, and the income based on such a fair market price is taxable. The purpose of these rules is to prevent tax avoidance in respect of property transfer among associated enterprises. Several other states follow the US example and provide that when taxpayers are no longer resident corporations, they shall pay tax for such constructed gains.

It is necessary to point out that some states regulate foreign investments and transactions of residents by foreign exchange regulations. Although the focus of foreign exchange regulation is on the economic effects of foreign investments, it can also help achieve the prevention of international tax avoidance. Up to now, some states including UK, Australia and New Zealand are still adopting foreign exchange regulations to deal with cross-border tax avoidance.

4. International Cooperation on Prevention of Tax evasion and Tax Avoidance.

The key to overcoming tax evasion in the international arena is cooperation. Although formal arrangements are still few, they are becoming more commonplace.

A few multilateral arrangements for the international exchange of information have been adopted. The 1972 Nordic Convention Regarding Mutual Assistance in Matters Relating to Tax^[37]is the most prominent. It provides for (a) exchange of information automatically, on request, and spontaneously; (b) the presence of a tax official from one country at a tax investigation in another country when the investigation is of interest to both countries; and (c) one country to carry out a tax investigation or audit at the request of another.

The European Community adopted a tax collaboration directive in 1975^[38]that is similar to the Nordic Convention. Unlike the Nordic Convention, however, the EC directive places several restrictions on the exchange of information between member states. First, a state does not have to provide the requested information if, under its own laws, it is not allowed to obtain that information for its own purposes. Second, a state may refuse to provide information that would disclose a commercial, industrial, or technical secret, or that would be contrary to thestate’s public policy. Third, a state does not have to provide information if the requesting state is unable to reciprocate (whether for practical or legal reason) with equivalent information. Finally, a state receiving confidential information must treat it according to the stricter of the secrecy provisions of the states involved.

In 1988, the Council of Europe and the Organization for Economic Cooperation and Development issued a draft Convention on Mutual Administrative Assistance in Tax Matters. This draft mirrors the provision of the EC directive in most respects but adds a significant provision requiring contracting states to “take the necessary steps to recover tax claims of[a requesting]state as if they were its own tax claims.”

Bilateral tax cooperation agreements are much more common than multilateral agreements. Both the UN Model Tax Treaty and the OECD Model Tax Treaty have articles requiring the tax authorities of the contracting states to exchange information. Both articles are similar to the European Community directive provisions, except that the tax information received by a state may be used only in connection with “taxes covered by the Convention.”The EC directive, by comparison, allows information a state receives to be used for any“taxation purpose.”

(Adapted from Chapter 17 of the International Economic Law written by Sheng Jianming and published by University of International Business and Economics Press in September 2011, and adapted from Chapter 13 of the International Business Law written by Ray August and published by High Education Press in 2002)

[The Reflections]

1. What is international tax evasion?

2. What is international tax avoidance?

3. What are the major differences between tax evasion and tax avoidance?

4. Please list main methods of international tax evasion and tax avoidance.

5. Please list the main measures of preventing from international tax evasion and tax avoidance.

【The In-depth】

Juridical Characteristics of Tax Havens

A. Characteristics of Tax Heavens

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 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.”

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”.

The definition given in this report does not fully cover contemporary facts, because bythis 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. Bi a, I. Costea, B.Danc u, 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”.

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.

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.

Firstly, 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 applied by the statutory criteria on income level or attracted.

Secondly, protection by the law of commercial or the financial transactions made by individuals or legal persons is another feature of tax havens, tax agreements concluded by the territorial entities for the double taxation of income in industrialized countries. These agreements are intended to ensure tax reduction, normally applied to the foreign investment in signatory countries, so that the tax system of tax havens should be attractive to foreign traders. The conclusion of bilateral treaties for the avoidance of double taxation is to reduce the opportunity or, in some cases, even to eliminate the withholding tax (withholding tax instead of income generation) operation for the country with productive activity and a practical level so high that the income tax is no tax in the paradise where the parent company is registered orthe product concerned is sold. Thus, an investment in Eastern Europe benefits from the advantages of double taxation treaties signed with countries of destination, if made by an offshore company if there is tax relief in the intermediate country. A very good example of such an intermediate country is Cyprus, which has a network of double taxation treaties with 43 countries. Other examples of suitable jurisdictions for the registration of holding companies are Britain, Denmark, Liechtenstein, Luxembourg and the Netherlands, one of the reasons being that these countries have concluded double tax treaties with a considerable number of countries, and leading a tax policy that encourages the establishment of holding companies.

Other characteristics relate to: development of a banking system without restrictive rules and constraints, which ensure rapid operations inside and outside, for the beneficiaries of corporate privacy, trusts and bank accounts into criminal sanctions, lack of control on trade, except those related to foreign currency, attracting activity of fictitious front companies, means for communication (telephone, telex, telegraph, air services) to a high functional level, minimal accounting formalities such as not requiring the submission of annual accounts of income and loss from the tax authorities. Analyzing economic development within the tax havens of prosperous states we note they develop activities that generate income from fees in the form of various services, or earnings from rental properties, from the employment of local staff, and not least in boosting tourism.

B. The Classification of Tax Havens

Tax havens can be divided into primary and secondary. Within the six main types of countries we can identify.

(a) Countries that do not apply any imposition on income and capital gains for individuals: Bahamas, Bahrain, Bermuda, Cayman Islands, Nauru, Saint Vincent, Turks and Caicos, Vanuatu and the Principality of Monaco.

(b) Countries wherein the income tax or benefit are established on a territorial basis(outside income is not taxed): Costa Rica, Hong Kong, Liberia, Malaysia, Panama, Philippines, Venezuela, and United Kingdom.

(c) Countries in which tax rates are less than the average high: Liechtenstein, Switzerland, British Virgin Islands, Netherlands Antilles, Jersey, and Ireland.

(d) Countries that offer specific benefits to companies or companies holding offshore: Luxembourg, Singapore, Holland, Denmark, and United Kingdom.

(e) Countries that offer tax exonerations created in the development of export industries: Ireland: companies formed before 1 January, 1981.

(f) Countries which offer specific advantages to certain companies, such as international business companies: Antigua, Aiguilles, Grenada, Jamaica, Barbados, or the banks with offshore activities: Switzerland.

The secondary tax havens include both small countries and industrialized countries; the level of taxation of certain types of income is high, but there are legal provisions with particular characters, which can be used in an operation by tax planning investors. The category of small territorial entities following examples is relevant: the Vatican, the Republic of Malta, French Polynesia, Tonga Islands, Maurice Islands, Djibouti Republic, Haiti, Virgin Islands, Jamaica, and Taiwan.

C. Short Insight of Tax Havens throughout the Territory of the European Continent

Tax havens are a reality today, and under the current global economic crisis, when countries are seeking to reinstate economic and financial situation, we assist to the propagation within the European Union of tax havens. At European level, liberal tax laws, considered individually for a particular Member State, may bring some economic and tax advantages, but at Community level, under current conditions, they are a potential danger for the EU.

In order to eliminate this danger, the Foreign Ministers of the Member States decided unanimously to apply severe measures: the rules that determine tax residency will reinforce and, parallel to it, they will take a number of other “conventional measures”, such as the hard checking double residence of the taxpayer, reviewing terms of exchange of information, the terms of mutual assistance on debt recovery, etc.

ANDORRA—Principality located on the border between France and Spain, known by tourists as a place of transit and shopping at much lower prices than elsewhere because of the lack of customs or excise duties, stands like a genuine tax haven because of low taxation. Thus, in Andorra there are no direct taxes; and the companies whose capital is owned by two thirds of the residents are registered in Andorra and do not pay income tax, they only impose a tax on production and imports ranging between 1-12% standard rate; the income tax is 4%.

BELGIUM is a land of contrasts, where the system is widely used for anonymous accounts of off-shore investment; particularly it is fostered for multinational companies; where high-tech industry development based on the facilities granted to the companies are“innovative”: exemption income tax for a period of 10 years.

CYPRUS has a strong legislation inspired by the British law, and appears as a true“paradise” especially for non-residents: foreign workers are accountable to Cyprus income tax at half the normal tax rate , while employees of local enterprises established abroad do not owetax on ‘Welcome to Cyprus ‘where they make and keep money in Cypriot banks. Permanent residents only owe a charge of 5% over 2000 revenues of CYP and a 20% tax applied to the capital increase from real estate transactions. Value added tax is usually only 8% of the enterprises benefits; there are taxed progressively but reasonably off-shore companies and establishments. Cypriot local foreign collective entities benefit from a highly advantageous tax regime (Which is why the number of offshore companies registered in Cyprus is very high).

Income taxes, which had been established for long time just at 4.25% were increased since 1 January 2003 to 10% in the EU integration perspective they do not owe tax on dividends, do not charge customs duty on import of goods.

As regards taxation in SWITZERLAND, it is worth noting that taxation is different and individual, in accordance with local regulations and with the numerous double taxation treaties. The main advantage is the promotion and guarantee by banking secrecy laws and even criminal sanctions, measures that have attracted a strong financial services development; so far these activities have a share of about 11% of gross domestic product.

The European Commission has fought for years against Switzerland’s tax regime, arguing that tax exemptions to companies that establish their headquarters here are actually illegal State aid, and this must be removed.

LUXEMBOURG is certainly a “haven of havens” as it has full coverage; the principle of banking secrecy is elevated to the rank of a constitutional principle (in the State Constitution there is written the principle of banking secrecy), while legislative measures to boost hiring personal record the lowest unemployment rate in continental Europe (less than 3%).

MALTA-relative to taxes, there is no difference in the tax for legal and natural persons, in relation to income tax. The level of taxation is progressive, the rate can reach up to 35%; the value added tax on goods and services is set at a level lower than the European average (18%); there is practiced a 15% tax on imported products.

In Malta you can easily set up businesses “off-shore” or business-type “holding” due to the corporate legislation, provided those entities should conduct activities outside the country.

Although the first paragraph of the Constitution defines it as “a democratic republic founded on work”. Tax haven of Malta is a sui generic type, because in spite of EU accession and euro adoption in recent years Malta has adopted several tax amnesties, one of them allowing those who have not declared their income to register anonymously, paying a fine only 4 percent of income.

Monaco is considered “tax havens paradise” from the fiscal point of view, as there are nodirect taxes. The charge, however a value-added tax harmonized with the level of VAT charged in France to 19.6%. Half of the work performed mainly concerns the banking, insurance and other services. In Monaco, there operate over seventy banks and other financial institutions, which run about 40 billion dollars annually.

SAN MARINO: in relation to tax law the signed agreement (proposed by the OECD) to exchange information between national authorities is currently subject to EU rules relating to the harmonization of indirect taxes only on duty.

With an area of only 0.44 km square, VATICAN is the smallest country in the world. Under a treaty dating from 1929, the Vatican does not pay property tax revenue from its subordinates, including shifting to the outside State boundaries.

D. Control Measures for Community Tax Evasion

Regarding the effects on national economies, the specialists’ opinions on tax havens are divided: some believe that tax havens are only one way to achieve tax fraud, while others argue that tax havens are ideal for minimizing tax obligations and encouraging the development of capital and foreign investments.

Our view is that not every operation related to tax havens, tax evasion is illegal and implies, in some cases, involving the application of tax legislation liberal economic policies based on the national ones. But it is also true that, for the use of tax havens to minimize the tax evasion practice, national legislation should be introduced with different limits, in line with the economic and social policy.

Given the global nature of the phenomenon of negative influences in relation to offshore tax heavens in states with a high level of taxation, the international bodies such as OECD, World Bank, EU, IMF, etc.., set policy directions of anti-offshore:

Remove conditions for unfair tax competition, resulting in tax evasion (OECD, UN, and EU);

Fight against money laundering and terrorist financing (FATF, UN).

A series of data in the EU directive, aimed at increasing the scope of the tax assistance between the Member States to adopt fiscal measures at national level, so that, at Community level, there should be ensured the compliance with EU tax law and the tax should be consistent among Member States. To this end, national initiatives must ensure the elimination of double taxation for the benefit of the taxpayer and not the Member States, and indirectly protect the tax base.

Community legislation gives the Member States a greater ease in developing their ownnational systems of direct taxation, in line with the economic and national economic policy, while initiating the interaction of tax systems solutions within the common market. The European Commission has not proposed to replace the national tax systems by a single Community system, now being essential to strengthen cooperation among Member States so that, finally, to ensure the smooth running of the 27 different national systems within the common market.

The Commission considers that the only way to combat the systematic review used by companies conducting fiscal operations in more than one Member State is to allow taxation of multinational groups, their work throughout the EU based on a common consolidated tax assistance society and not individual subsidiaries and the parent company.

Given that the OECD currently estimates that through private capital there are accumulated in tax havens around a trillion dollars, five times more than two decades ago, as more than a million companies, especially in the U.S. and European Union Member States, have their registered offices in countries where tax havens are this way, the European Parliament notes in the report on promoting good governance in tax matters, the February 2, 2010 that:

— It takes consistency and a real policy on good governance EU tax;

— The tax to be set through good governance transparency, information sharing at all levels, effective cross-border cooperation and fair tax competition;

— The credibility of EU depends, among other things, on its willingness to primarily suppress tax havens on its territory, as an example of good governance;

— Requires the Commission to monitor closely in this context, rapid and sound implementation of actions in its Communication on the promotion of good governance in tax matters;

— Recalls that tax evasion in VAT is of particular concern for the internal market to the extent that it has direct cross-border impacts, involves a substantial loss of income and directly affects the EU budget;

— Urges the Council to adopt a directive on taxation and administrative cooperation to combat VAT fraud, taking account the Parliament’s position.

Compared to the Community objectives for combating tax evasion, we find that through the legislative measures taken by Romania so far , our country is only at a declarative level of anti-offshore measures, expressed only as simple political statements.

(Written by Adrian Constantin MANEA of the Transilvania University of Brasov and from the article THE TAX HAVENS BETWEEN MEASURES OF ECONOMIC STIMULATION AND MEASURES AGAINST TAX EVASION)

[The Terms]

1. Off-shore companies：离岸公司。

2. Tax shelter: 避税手段。

3. Balance sheet: 资产负债表。

4. Tax fraud: 纳税欺诈。

5. Capital flight: 资本外逃。

6. Tax incentive: 税收优惠鼓励。

7. Statutory criteria: 法定准则。

8. Signatory country: 签约国。

9. Beneficiary: 受益人，收款人。

10. Fictitious front company: 虚拟前台公司。

11. FATF: Financial Action Task Force on Money Laundering, 反洗钱金融特别行动工作组（西方七国1989年设立于巴黎的政府间国际组织，是目前世界上最具影响力的国际反洗钱、反恐融资国际组织）。

12. VAT: Value Added Tax, 增值税。

[The Discussions]

1. The definition and scope of tax heaven.

2. The relationship between tax heaven and transfer pricing and other method of tax evasion and tax avoidance.

3. The choice between measures of economic stimulation and measures against tax evasion and tax avoidance.

【The Further Sources】

Reuven S. Avi-Yonah,International Tax as International Law: An Analysis of the International Tax Regime, Cambridge University Press, 2007.

Peter Harris and David Oliver, International Commercial Tax, Cambridge University Press, 2010.

Ernest R. Larkins, International Applications of U.S. Income Tax Law, John Wiley ＆ Sons, Inc, 2004.

Jane G. Gravelle, Tax Havens: International Tax Avoidance and Evasion, National Tax Journal Vol. LXIl, No. 4 December 2009.

Werner Güth, Sabine Strau and Matthias Sutter, Tax Evasion and State Productivity—an Experimental Study, ©Blackwell Publishing Ltd 2005, 9600 Garsington Road, Oxford OX4 2DQ, UK.

Arindam DAS-GUPTA ＆ Iran GANG, Decomposing Revenue Effects of Tax Evasion and Tax Structure Changes, International Tax and Public Finance, 7, 177—194, 2000.

Kinberley A. Scharf, International Capital Tax Evasion and the Foreign Tax Credit Puzzle, Canadian Journal of Economics Vol. 34, No. 2 May 2001.

Jeffrey Owens, Tax evasion: Ready when the call came, OECD Yearbook 2011.

Robin BOADWAY ＆ Motohiro SATO, The Optimality of Punishing Only the Innocent: The Case of Tax Evasion, International Tax and Public Finance, 7, 641—664, 2000.

【注释】

[1]外籍居民，外侨，指拥有一国永久居住权、但不拥有该国国籍、不属于该国公民的人。

[2]绿卡，一国给外国居民签发的永久居住许可证，持卡人拥有签发国的永久居留权，且可在一定时间内免去入境签证。该词起源于美国，因美国最初的永久居留许可证为绿色而得名。

[3]住所，指自然人设立其生活根据地并愿意永久居留的场所。任何人只能有一个住所，其确定一方面取决于居住的事实，令一方面取决于当事人永久居住的意愿。

[4]《中华人民共和国民法通则》。

[5]户口。

[6]惯常居所，指实际居住且经常居住的场所。与住所相比，不特别强调其永久居住的意思；与居所相比，侧重其实际居住且经常居住的特性。

[7]无限纳税责任，即纳税人对来自境内和境外的所有所得都负有纳税义务。

[8]有限纳税责任，即纳税人仅对来自征税国境内的所得负有纳税义务。

[9]连接因素，指各国行使税收管辖权时采用的管辖权标志。每个税收管辖权都有相应的连接因素：居民税收管辖权的连接因素是居民，收入来源地税收管辖权的连接因素是收入来源地，等等。由于一个应纳税收入往往通过多个连接因素与不同国家的多个税收管辖权相连接，因此出现国际重复征税问题。

[10]经济上的重复征税，亦称重叠征税，或双层征税。是指针对同一应纳税所得，对不同纳税人分别征税。

[11]法律上的重复征税，亦称重复征税，或双重征税。是指由于不同的税收管辖权的冲突，按同一税种，对同一纳税人的同一纳税所得在同一纳税期间同时分别征税。国际重叠征税与国际重复征税的区别：（1）二者的基本区别在于纳税人不同。国际重复征税是对同一纳税人的同一所得重复征税，国际重叠征税则是对不同纳税人的同一所得两次或多次征税；（2）税种不一定相同。国际重复征税是两国或多国按同一税种对同一所得重复征税，国际重叠征税则是两国或多国按同一税种或不同税种对同一所得分别征税；（3）国际重叠征税对应于国内重叠征税，国际重复征税则一般没有对应的国内重复征税，只有少数联邦制国家才会有国际重复征税现象。

[12]税收中性，指国家税收应最小限度地使纳税人承受额外经济负担和损失，一个好的税收制度，应对人民的生产和消费不产生大的影响，其实质是尽量减少国家通过税收手段对市场进行的干预。

[13]Organization for Economic Cooperation and Development，经济合作与发展组织，简称经合组织，成立于1961年，是由多个市场经济国家组成的政府间国际经济组织，目前成员国34个，总部设在巴黎。

[14]OECD Model Convention, 全称OECD Model Double Taxation Convention on Income and Capital, 即经济与合作组织关于所得和资本避免重复征税的协定范本，简称OECD范本，或经合组织范本，是经合组织1977年颁布的一个税收协定范本，旨在避免国际间重复征税、消除税收差别待遇及通过各国税务部门的协作来防止国际偷漏税等。与OECD范本并行的还有UN范本（即联合国范本，全称《联合国关于发达国家与发展中国家双重征税的协定范本（UN Model Double Taxation Convention between Developed and Developing Countries）》）。通常认为，两个范本虽结构和内容大体相似，但OECD范本尽力维护发达国家利益，偏重保护居民税收管辖权；而UN范本则侧重维护发展中国家利益，强调收入来源国税收管辖权优先的原则。

[15]European Commission, 欧盟委员会，欧盟的常设执行机构，也是欧盟起草法令的有权机构。

[16]税务相互协助多国协定，缔约国有欧盟诸成员国及加拿大、澳大利亚、芬兰、日本、美国和新西兰。

[17]免税法，又称豁免法，即居民（或公民）税收管辖国对本国居民（或公民）来源于国外已征税所得或财产，在一定条件下免征所得税或财产税。

[18]抵免法，即对纳税人来源于国内外的全部所得或财产课征所得税时允许其以在国外缴纳的所得税或财产税税款抵免应纳税款的税收优惠方法。

[19]扣除法，即居民国在对跨国纳税人征税时，允许本国居民将国外已纳税款作为一般费用支出从本国应纳税所得中扣除。

[20]税收筹划，指纳税人在合法的前提下，事前选择税收利益最大化的方案处理自己的生产、经营、投资及理财活动的一种筹划行为，其目的是实现缴纳最低的税收。

[21]税务申报表。

[22]谎报，虚假陈述。

[23]津贴，补贴。

[24]资本弱化，指企业或其投资者为获取最大化利益，在融资和投资方式上，降低股本的比重，提高贷款的比重，使企业的负债与所有者权益的比例超过一定限度，从而逃避税收、获取更高利益的现象。根据经合组织的定义，企业权益资本与债务的比例应为1:1，若权益资本小于债务时，即认定存在资本弱化。

[25]转移定价，指跨国公司内部，利用企业各分支机构所在国家或地区的税率及免税条件的差异，在母子公司之间、子公司之间或母公司与各分支机构之间销售产品、转让技术、提供服务、借贷资金等，以内部定价的方式转移成本或利润，达到规避税收、实现利益最大化的目的。

[26]中国注册会计师。

[27]美国国内税务局，美国财政局下属的一个庞大机构，负责为美国征收联邦税。

[28]业务和财产的转让、让渡。

[29]Acquisition，购并，多指一个公司收购其他公司股份从而接管对方公司，两个法人实体在交易后仍可同时存在；merger，兼并，大多以被兼并公司法人身份消灭为形式，少数情况下成为被控股公司仍保留法人身份和名称。

[30]清算。

[31]美国国内收入法典，即习惯上所说的美国税法典，由美国国会颁布，属于《美国法典》第26标题部分（Title26）。

[32]“实质重于形式”，指当某一事项的经济实质和法律形式不一致时，更强调经济实质，并按照经济实质进行会计核算及会计报告的原则。

[33]避税天堂，是一些税率很低、甚至完全免征税款的国家或地区。避税天堂大多是较小的沿海国家或内陆小国，甚至很小的岛屿或“飞地”，自然资源稀缺、人口数量较少、经济基础薄弱。著名的避税天堂如：英属维尔京群岛、开曼群岛、百慕大群岛、巴哈马、荷属安的列斯、摩纳哥、安道尔、列支敦士登等。

[34]公平交易原则，即有关联关系的双方进行交易时，必须按照双方相互独立、假设不存在关联关系的原则进行成本和售价核算。

[35]税收协定滥用，指本无资格享受某税收协定优惠待遇的第三国居民，通过在协定缔约国一方境内设立一个具有该国国民身份的传输公司（也称导管公司），从而间接享受了该税收协定提供的税收优惠。

[36]资本所得的变现。

[37]北欧多边税收协助公约，1972年，北欧五国瑞典、挪威、芬兰、丹麦、冰岛签署，并于1973年生效，共24条，内容涉及税收信息交换、税收调查、税务报表、税款征收等，是目前唯一一个对签字国有约束力的多边税收公约。其中涉及的税收合作范围大大超出了双边税收协定和传统的多边协助界限。

[38]指欧共体税务机关相互协助指令。