Tax Haven Vs. Tax Shelters: Is There a Difference?

Tax Haven Vs. Tax Shelters: Is There a Difference?

Tax shelters are simply investment accounts, securities, investment, and tax-planning strategies that minimize tax liability within your own country’s tax system.

Tax Havens

A tax haven is simply a locale, whether a country, state, or territory, that has less-than-stringent tax laws. In some cases, these places either have no income tax at all, or they charge very reduced tax rates. The use of tax havens is so prevalent in the global economy that you would be hard-pressed to find a multinational corporation that does not take advantage of the benefits of tax havens in some way.

However, these bastions of tax-free profits are not only for large companies. In general, tax havens also provide offshore banking services to nonresident companies and individuals. In addition to having easy access to offshore bank accounts and trusts, foreigners can easily form an international business corporation (IBC) or offshore corporation.

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