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Do not fill this in! == Tax havens == {{See also|United States as a tax haven|Panama as a tax haven}} {{Quote box |quote = Ninety-five per cent of our work coincidentally consists in selling vehicles to avoid taxes. |source = Mossack Fonseca<ref name="Guardian: how the rich" /> |width = 220px |title = From a leaked internal memorandum }} Individuals and entities may open offshore accounts for any number of reasons, some of which are legal.<ref name="ABC explainer" /> A Canadian lawyer based in Dubai noted, for example, that businesses might wish to avoid falling under [[Islamic inheritance jurisprudence]] if an owner dies.<ref>{{cite news |url=http://www.cbc.ca/news/canada/montreal/panama-helene-mathieu-dubai-1.3519760 |author=Salimah Shivji |title=Panama Papers: Quebec lawyer based in Dubai linked to Mossack Fonseca |work=[[CBC News]] |date=April 4, 2016 |access-date=April 20, 2016 |url-status=live |archive-url = https://web.archive.org/web/20160422135758/http://www.cbc.ca/news/canada/montreal/panama-helene-mathieu-dubai-1.3519760 |archive-date=April 22, 2016 }}</ref> Businesses in some countries may wish to hold some of their funds in dollars also, said a Brazilian lawyer.<ref name=BillBraMex>{{cite magazine |url = https://www.forbes.com/sites/kerryadolan/2016/04/14/billionaires-from-brazil-and-mexico-named-in-the-panama-papers-leak/#559828362119 |title=Billionaires From Brazil And Mexico Named In The Panama Papers Leak |author=Kerry A. Dolan |date=April 14, 2016 |access-date=April 23, 2016 |magazine=Forbes |url-status=live |archive-url = https://web.archive.org/web/20160422155920/http://www.forbes.com/sites/kerryadolan/2016/04/14/billionaires-from-brazil-and-mexico-named-in-the-panama-papers-leak/#559828362119 |archive-date=April 22, 2016 }}</ref> [[Estate planning]] is another example of legal [[tax avoidance]]. American film-maker [[Stanley Kubrick]] had an estimated personal worth of $20 million when he died in 1999, much of it invested in an 18th-century English manor he bought in 1978. He lived in that manor for the rest of his life, filming scenes from ''[[The Shining (film)|The Shining]]'', ''[[Full Metal Jacket]]'', and ''[[Eyes Wide Shut]]'' there as well. Three holding companies set up by Mossack Fonseca now own the property, and are in turn held by trusts set up for his children and grandchildren.<ref name=gustars>{{cite news |url = https://www.theguardian.com/news/2016/apr/06/panama-papers-reveal-offshore-dealings-stars |title=From Kubrick to Cowell: Panama Papers expose offshore dealings of the stars |author1=Holly Watt |author2=David Pegg |author3=Juliette Garside |author4=Helena Bengtsson |newspaper=The Guardian |date=April 6, 2016 |access-date=April 23, 2016 |url-status=live |archive-url = https://web.archive.org/web/20160423013616/http://www.theguardian.com/news/2016/apr/06/panama-papers-reveal-offshore-dealings-stars |archive-date=April 23, 2016 }}</ref> Since Kubrick was an American living in Britain, without the trust his estate would have had to pay transfer taxes to both governments and possibly have been forced to sell the property to obtain the liquid assets to pay them.<ref name=NW>{{cite magazine |url = http://www.newsweek.com/panama-papers-stanley-kubrick-tax-shelters-448494 |title = PANAMA PAPERS: WHAT STANLEY KUBRICK CAN TEACH YOU ABOUT TAX SHELTERS |author=Leah McGrath Goodman |date=April 15, 2016 |access-date=April 23, 2016 |magazine=Newsweek |url-status=live |archive-url = https://web.archive.org/web/20160423020203/http://www.newsweek.com/panama-papers-stanley-kubrick-tax-shelters-448494 |archive-date=April 23, 2016 }}</ref> Kubrick is buried on the grounds along with one of his daughters, and the rest of his family still lives there.<ref name=gustars /><ref name=NW /> [[File:HMRC offshore evasion poster February 2014.jpg|thumbnail|Poster issued by the British tax authorities to counter offshore tax evasion]] Other uses are more ambiguous. Chinese companies may incorporate offshore in order to raise foreign capital, normally against the law in China.<ref name=NARthird>{{cite news |url = http://asia.nikkei.com/Politics-Economy/International-Relations/A-third-of-Panama-Papers-shell-companies-set-up-from-Hong-Kong-China |archive-url=https://web.archive.org/web/20160515152316/http://asia.nikkei.com/Politics-Economy/International-Relations/A-third-of-Panama-Papers-shell-companies-set-up-from-Hong-Kong-China |archive-date=May 15, 2016 |title=A third of Panama Papers shell companies set up from Hong Kong, China |author=Yasuo Awai |date=April 23, 2016 |access-date=April 23, 2016 |publisher=Nikkei Asian Review }}</ref> In some of the world's hereditary dictatorships, the law may be on the side of the elite who use offshore companies to award oil contracts to themselves,<ref name=MondePanAf1>{{cite news |url=http://www.lemonde.fr/afrique/article/2016/04/04/les-africains-du-panama-1-les-circuits-offshore-des-fils-de_4895102_3212.html#JWAeAK6oVt0UvEe4.99 |title=Les Africains du Panama (1): les circuits offshore des 'fils de' |author1=Joan Tilouine |author2=ICIJ |date=April 4, 2016 |access-date=April 30, 2016 |work=Le Monde |language=fr |archive-url=https://web.archive.org/web/20161112044052/http://www.lemonde.fr/afrique/article/2016/04/04/les-africains-du-panama-1-les-circuits-offshore-des-fils-de_4895102_3212.html#JWAeAK6oVt0UvEe4.99 |archive-date=November 12, 2016 |url-status=live }}</ref> or gold concessions to their children,<ref name=Azer>{{cite news |url = https://www.theguardian.com/news/2016/apr/05/panama-papers-london-law-firm-helped-azerbaijan-first-family-set-up-secret-offshore-firm |title=London law firm helped Azerbaijan's first family set up secret offshore firm: Panama Papers shine light on hidden property portfolio of President Aliyev's daughters |author1=Juliette Garside |author2=Luke Harding |author3=David |author4=Holly Watt |work=The Guardian |date=April 5, 2016 |access-date=April 19, 2016 |url-status=live |archive-url = https://web.archive.org/web/20160419025140/http://www.theguardian.com/news/2016/apr/05/panama-papers-london-law-firm-helped-azerbaijan-first-family-set-up-secret-offshore-firm |archive-date=April 19, 2016 }}</ref> however such dealings are sometimes prosecuted under international law.<ref name=mal>{{cite news |url=http://www.lemonde.fr/afrique/article/2015/09/15/l-encombrant-bras-droit-d-ali-bongo_4757894_3212.html |title=L'encombrant bras droit d'Ali Bongo |author1=Cyril Bensimon |author2=Christophe Châtelot |author3=Joan Tilouine |author4=Simon Piel |language=fr |work=LE MONDE |date=September 15, 2015 |access-date=May 1, 2016 |archive-url=https://web.archive.org/web/20160629181128/http://www.lemonde.fr/afrique/article/2015/09/15/l-encombrant-bras-droit-d-ali-bongo_4757894_3212.html |archive-date=June 29, 2016 |url-status=live }}</ref> While no standard official definition exists, ''[[The Economist]]'' and the [[International Monetary Fund]] describe an [[offshore financial centre|offshore financial center]], or [[tax haven]], as a jurisdiction whose banking infrastructure primarily provides services to people or businesses who do not live there, requires little or no disclosure of information when doing business, and offers low taxes.<ref name=econ>{{Cite news |url=http://www.economist.com/node/8695139 |title=Places in the sun: a special report on offshore finance |date=February 24, 2007 |newspaper=The Economist |issn=0013-0613 |archive-url=https://web.archive.org/web/20160407224104/http://www.economist.com/node/8695139 |archive-date=April 7, 2016 |access-date=April 6, 2016 |format=PDF |url-status=live }}</ref><ref name=imfdef>{{cite web |url=http://www.imf.org/external/pubs/ft/wp/2007/wp0787.pdf |title=Concept of Offshore Financial Centers: In Search of an Operational Definition |last=Zoromé |first=Ahmed |date=April 1, 2007 |series=IMF Working Papers |publisher=International Monetary Fund |page=4 |access-date=April 6, 2016 |url-status=live |archive-url=https://web.archive.org/web/20160407224029/http://www.imf.org/external/pubs/ft/wp/2007/wp0787.pdf |archive-date=April 7, 2016 }}</ref> "The most obvious use of offshore financial centers is to avoid taxes", ''The Economist'' added.<ref name="econ"/> [[Oxfam]] blamed tax havens in its 2016 annual report on income inequality for much of the widening gap between rich and poor. "Tax havens are at the core of a global system that allows large corporations and wealthy individuals to avoid paying their fair share," said Raymond C. Offenheiser, president of Oxfam America, "depriving governments, rich and poor, of the resources they need to provide vital public services and tackle rising inequality".<ref>{{cite news |url=https://www.bostonglobe.com/business/2016/01/18/wealth-inequality-rising-fast-oxfam-says-faulting-tax-havens/yK7ge90muZME6UWTPj25hN/story.html |title=Wealth inequality rising fast, Oxfam says, faulting tax havens |author=Patricia Cohen |date=January 19, 2016 |newspaper=Boston Globe |access-date=April 17, 2016 |url-status=live |archive-url=https://web.archive.org/web/20160425063242/https://www.bostonglobe.com/business/2016/01/18/wealth-inequality-rising-fast-oxfam-says-faulting-tax-havens/yK7ge90muZME6UWTPj25hN/story.html |archive-date=April 25, 2016 }}</ref> [[International Monetary Fund]] (IMF) researchers estimated in July 2015 that [[base erosion and profit shifting|profit shifting]] by multinational companies costs [[developing country|developing countries]] around US$213 billion a year, almost two percent of their national income.<ref name=imf>{{cite web |url=https://panamapapers.investigativecenters.org/uganda/ |archive-url = https://web.archive.org/web/20160529035022/https://panamapapers.investigativecenters.org/uganda/ |archive-date=May 29, 2016 |publisher=ANCIR |title=Leaked emails expose Heritage plot to dodge Uganda tax |first=Tabu |last=Butagira }}</ref> Igor Angelini, head of [[Europol]]'s Financial Intelligence Group, said that [[shell companies]] "play an important role in large-scale money laundering activities" and that they are often a means to "transfer bribe money".<ref name=firm>{{cite news |url=http://panamapapers.sueddeutsche.de/articles/56febf8da1bb8d3c3495adec/ |title=Panama Papers: The Firm |first1=Hans |last1=Leyendecker |first2=Frederik |last2=Obermaier |first3=Bastian |last3=Obermayer |first4=Vanessa |last4=Wormer |newspaper=Süddeutsche Zeitung |access-date=April 7, 2016 |url-status=live |archive-url = https://web.archive.org/web/20160407224444/http://panamapapers.sueddeutsche.de/articles/56febf8da1bb8d3c3495adec/ |archive-date=April 7, 2016 }}</ref> [[Tax Justice Network]] concluded in a 2012 report that "designing commercial tax abuse schemes and turning a blind eye upon suspicious transactions have become an inherent part of the work of bankers and accountants".<ref name=":0">{{cite web |url = http://www.taxjustice.net/cms/upload/pdf/FSI2012_BanksBig4.pdf |title=Financial Secrecy, Banks and the Big 4 Firms of Accountants |last1=Harari |first1=Morgan |last2=Meinzer |first2=Markus |date=October 1, 2012 |publisher=[[Tax Justice Network]] |access-date=April 6, 2016 |last3=Murphy |first3=Richard |url-status=dead |archive-url = https://web.archive.org/web/20160407224017/http://www.taxjustice.net/cms/upload/pdf/FSI2012_BanksBig4.pdf |archive-date=April 7, 2016 }}</ref> Money-laundering affects the [[first world]] as well, since a favored [[shell company]] investment is [[real estate]] in Europe and North America. London, Miami, New York, Paris, Vancouver and San Francisco have all been affected. The practice of parking [[asset]]s in luxury real estate has been frequently cited as fueling rocketing housing prices in Miami,<ref>{{cite news |url=http://www.orlandoweekly.com/Blogs/archives/2016/04/05/miamis-luxury-real-estate-boom-connected-to-panama-papers |title=Miami's luxury real estate boom connected to Panama Papers |date=April 5, 2016 |access-date=April 22, 2016 |newspaper=Orlando Weekly |url-status=live |archive-url=https://web.archive.org/web/20160423075257/http://www.orlandoweekly.com/Blogs/archives/2016/04/05/miamis-luxury-real-estate-boom-connected-to-panama-papers |archive-date=April 23, 2016 }}</ref><ref>{{cite news |url=http://www.miamiherald.com/news/business/real-estate-news/article35702148.html |archive-url=https://web.archive.org/web/20160529034918/http://www.miamiherald.com/news/business/real-estate-news/article35702148.html |archive-date=May 29, 2016 |title=Locked out of boom, buyers hunt for new housing hot spots |date=September 18, 2015 |access-date=April 19, 2016 |newspaper=Miami Herald}}</ref><ref>{{cite news |url=http://www.miaminewtimes.com/news/feds-will-track-how-much-of-miamis-real-estate-boom-is-being-fueled-by-money-laundering-8174220 |title=Feds Will Track How Much of Miami's Real-Estate Boom Is Being Fueled by Money Laundering |author=Kyle Munzenrieder |date=January 13, 2016 |access-date=April 22, 2016 |newspaper=Miami New Times |url-status=live |archive-url=https://web.archive.org/web/20160408171744/http://www.miaminewtimes.com/news/feds-will-track-how-much-of-miamis-real-estate-boom-is-being-fueled-by-money-laundering-8174220 |archive-date=April 8, 2016 }}</ref> where the Miami Association of Realtors said that cash sales accounted for 90% of new home sales in 2015.<ref>{{cite news |url=http://amp.miamiherald.com/news/business/real-estate-news/article69248462.html |title=How secret offshore money helps fuel Miami's luxury real-estate boom |author=Nicholas Nehemas |newspaper=Miami Herald |date=April 3, 2016 |access-date=October 1, 2017 |url-status=live |archive-url=https://web.archive.org/web/20171002070902/http://amp.miamiherald.com/news/business/real-estate-news/article69248462.html |archive-date=October 2, 2017 }}</ref> "There is a huge amount of dirty money flowing into Miami that's disguised as investment," according to former congressional investigator [[Jack Blum]].<ref name=":3">{{Cite news |last=Silverstein |first=Ken |date=October 2, 2013 |title=Miami: Where Luxury Real Estate Meets Dirty Money |language=en-US |url=https://www.thenation.com/article/archive/miami-where-luxury-real-estate-meets-dirty-money/ |access-date=May 22, 2023 |issn=0027-8378}}</ref> In Miami, 76% of condo owners pay cash (as opposed to using a mortgage), a practice considered a red flag for money-laundering, as of 2016.<ref name=":3" /> Analysis from Redfin in 2022 found that 31.9% of houses were purchased with cash across the 39 largest metropolitan areas in the US.<ref name=":4">{{Cite web |title=Share of Homes Bought With All Cash Hits Highest Level Since 2014 |url=https://www.redfin.com/news/all-cash-home-purchases-fha-loans-october-2022/ |access-date=May 22, 2023 |website=www.redfin.com}}</ref> This is higher than the sub 25% cash purchase rate as seen during the purchase of the Panama papers.<ref name=":4" /> Real estate in London, where housing prices increased 50% from 2007 to 2016, also is frequently purchased by overseas investors.<ref>{{cite news |url = https://www.bbc.com/news/business-32977217 |title=Property cash buyers at record high, Nationwide says |date=June 3, 2015 |access-date=April 19, 2016 |work=BBC News |url-status=live |archive-url = https://web.archive.org/web/20160525104623/http://www.bbc.com/news/business-32977217 |archive-date=May 25, 2016 }}</ref><ref>{{cite news |url = https://www.independent.co.uk/news/business/news/house-prices-hit-record-high-as-uk-housing-crisis-worsens-10189495.html |title=House prices hit record high as UK housing crisis worsens: London prices have shot up almost 50 per cent, or £195,420, since the last election in May 2010 |date=April 20, 2015 |access-date=April 19, 2016 |newspaper=The Independent |url-status=live |archive-url=https://web.archive.org/web/20160406215620/http://www.independent.co.uk/news/business/news/house-prices-hit-record-high-as-uk-housing-crisis-worsens-10189495.html |archive-date=April 6, 2016 }}</ref><ref name="FThousML">{{cite news |url = http://www.ft.com/intl/cms/s/0/f454e3ec-fc02-11e5-b5f5-070dca6d0a0d.html#axzz46cKuqjZY |title=How laundered money shapes London's property market |author=Judith Evans |date=April 6, 2016 |access-date=April 22, 2016 |newspaper=Financial Times |url-status=live |archive-url = https://web.archive.org/web/20160817030628/http://www.ft.com/intl/cms/s/0/f454e3ec-fc02-11e5-b5f5-070dca6d0a0d.html#axzz46cKuqjZY |archive-date=August 17, 2016 }}</ref> Donald Toon, head of Britain's [[National Crime Agency]], said in 2015 that "the London property market has been skewed by laundered money. Prices are being artificially driven up by overseas criminals who want to sequester their assets here in the UK".<ref name=FThousML /> Three quarters of Londoners under 35 cannot afford to buy a home.<ref name=FThousML /> Andy Yan, an urban planning researcher and adjunct professor at the [[University of British Columbia]], studied real estate sales in Vancouver—also thought to be affected by foreign purchasers—found that 18% of the transactions in Vancouver's most expensive neighborhoods were cash purchases, and 66% of the owners appeared to be Chinese nationals or recent arrivals from China.<ref>{{cite news |url=http://www.cbc.ca/news/canada/british-columbia/vancouver-foreign-ownership-study-1.3301061 |title=Vancouver foreign ownership research prompts cries of racism in hot housing market |date=November 2, 2015 |access-date=April 22, 2016 |publisher=CBC News |url-status=live |archive-url=https://web.archive.org/web/20160509023954/http://www.cbc.ca/news/canada/british-columbia/vancouver-foreign-ownership-study-1.3301061 |archive-date=May 9, 2016 }}</ref> Calls for more data on foreign investors have been rejected by the provincial government.<ref>{{cite news |url=http://www.cbc.ca/news/canada/british-columbia/premier-clark-was-asked-the-wrong-question-on-foreign-ownership-of-housing-1.3073486 |title=Premier Clark was asked the wrong question on foreign ownership of housing: The B.C. government needs to find out exactly how much foreign cash flows into BC real estate |author=Greg Rasmussen |date=May 14, 2015 |access-date=April 22, 2016 |publisher=CBC News |url-status=live |archive-url=https://web.archive.org/web/20160309015958/http://www.cbc.ca/news/canada/british-columbia/premier-clark-was-asked-the-wrong-question-on-foreign-ownership-of-housing-1.3073486 |archive-date=March 9, 2016 }}</ref> Chinese nationals accounted for 70% of 2014 Vancouver home sales for more than CA$3 million.<ref> {{cite news |url=https://www.theglobeandmail.com/report-on-business/industry-news/the-law-page/canadian-banks-helping-clients-bend-rules-to-move-money-out-of-china/article26246404/ |title=Canadian banks helping clients bend rules to move money out of China |author=Kathy Tomlinson |newspaper=Globe and Mail |date=September 8, 2016 |access-date=April 22, 2016 |url-status=live |archive-url=https://web.archive.org/web/20160425230129/http://www.theglobeandmail.com/report-on-business/industry-news/the-law-page/canadian-banks-helping-clients-bend-rules-to-move-money-out-of-china/article26246404/ |archive-date=April 25, 2016 }}</ref> On June 24, 2016 [[China CITIC Bank|China CITIC Bank Corp]] filed suit in Canada against a Chinese citizen who borrowed [[Renminbi|CN¥]]50 million for his lumber business in China, but then withdrew roughly [[Canadian dollar|CA$]]7.5 million from the line of credit and left the country. He bought three houses in Vancouver and Surrey, British Columbia together valued at CA$7.3 million during a three-month period in June 2014.<ref name=real> {{cite news |url=http://www.cbc.ca/news/canada/british-columbia/china-real-estate-vancouver-fugitive-1.3655136 |title=Chinese bank claims fugitive bought luxury B.C. real estate: B.C. Supreme Court order freezes Shibiao Yan's assets while bank tries to get back $10 million loan |author=Jason Proctor |agency=CBC News |date=June 27, 2016 |url-status=live |archive-url=https://web.archive.org/web/20160721001233/http://www.cbc.ca/news/canada/british-columbia/china-real-estate-vancouver-fugitive-1.3655136 |archive-date=July 21, 2016 }} </ref> === International banking === {{See also|Foreign Account Tax Compliance Act|Organisation for Economic Co-operation and Development|Common Reporting Standard}} "This issue will surely be raised at the G20 summit," predicted Tomasz Kozlowski, Ambassador of the [[European Union]] (EU) to India. "We need to strengthen international cooperation for exchange of tax information between tax authorities".<ref> {{cite news |url=http://indianexpress.com/article/india/india-news-india/panama-papers-tax-avoidance-issue-to-be-taken-up-at-g20-leaders-summit |access-date=April 18, 2016 |newspaper=Indian Express |title=Panama Papers: Tax avoidance issue to be taken up at G20 Leaders' Summit |date=April 14, 2016 |url-status=live |archive-url=https://web.archive.org/web/20160418023052/http://indianexpress.com/article/india/india-news-india/panama-papers-tax-avoidance-issue-to-be-taken-up-at-g20-leaders-summit/ |archive-date=April 18, 2016 }} </ref> Panama, [[Vanuatu]] and Lebanon may find themselves on a list of uncooperative tax havens that the [[Organisation for Economic Co-operation and Development]] (OECD) re-activated in July 2016 at the request of [[G20]] nations, warned ''[[Le Monde]]'', a French newspaper that participated in the investigation. Those three countries followed none of the OECD's three broad guidelines for international banking cooperation:<ref name=list>{{cite news |url=http://www.lemonde.fr/panama-papers/article/2016/04/16/panama-papers-panama-vanuatu-et-liban-sont-menaces-de-figurer-sur-la-liste-noire-des-paradis-fiscaux_4903528_4890278.html |title=Panama papers: Panama, Vanuatu et Liban sont menacés de figurer sur la liste noire des paradis fiscaux |trans-title=Panama Papers: Panama, Vanuatu and Lebanon at risk of appearing on tax haven blacklist |language=fr |author1=Anne Michel |author2=Maxime Vaudano |date=April 16, 2016 |access-date=April 18, 2016 |newspaper=Le Monde |archive-url=https://web.archive.org/web/20160417101213/http://www.lemonde.fr/panama-papers/article/2016/04/16/panama-papers-panama-vanuatu-et-liban-sont-menaces-de-figurer-sur-la-liste-noire-des-paradis-fiscaux_4903528_4890278.html |archive-date=April 17, 2016 |url-status=live }}</ref> * information exchange on request * a signed multilateral agreement on information standards * a commitment to implement automated information exchange in 2017 or 2018<ref name=list /> The [[OECD]], the [[G20]], or the [[European Union]] could also institute another list for countries that are inadequate in more than one area. Countries meeting none of these criteria, such as Panama, Vanuatu and Lebanon, would go on the blacklist. Countries that meet only one criterion would go on the greylist.<ref name=list /> In April 2016, if this greylist had been in place it would have included nine countries: [[Antigua and Barbuda]], [[Bahrain]], [[Brunei]], [[Dominica]], [[Liberia]], [[Nauru]], [[Samoa]], [[Tobago]] and the [[United Arab Emirates]].<ref name=list /> Summary: Please note that all contributions to Christianpedia may be edited, altered, or removed by other contributors. If you do not want your writing to be edited mercilessly, then do not submit it here. You are also promising us that you wrote this yourself, or copied it from a public domain or similar free resource (see Christianpedia:Copyrights for details). Do not submit copyrighted work without permission! Cancel Editing help (opens in new window) Discuss this page