Paula B

INTRODUCTION

The oldest tax havens of our times include Liechtenstein, Switzerland and Panama - each of which is believed to date back to the 1920s. With mounting pressure from international organizations like OECD and the G-20, tax havens may find it difficult to sustain their carefree existence. Moreover, the growing numbers of Tax Information Exchange Agreements (TIEAs) and Mutual Legal Assistance Treaties (MLAT) between tax havens and other countries like the U.S. would take away tax havens' competitive advantage- newsletter - Taking A Look At Tax Havens by Manoj Singh . for the firm or individual who is seeking to evade the paying of their tax liability to their respective governments, this could spell digging deeper into their coffers and rendering to Caesar what is rightfully his, for the criminally minded individual(s) a curtailment of money laundering and a lowering of terrorist funding. Finally there are the social and political benefits of having these offshore entities operating within these jurisdictions that could mean a drop in GDP and the standard of living of some citizens who are employed in the Offshore industry.

The factors that can be linked to a jurisdiction being classified as a tax haven are transparency, the lack of exchange of information, and little or no taxation on relevant income which all merit some form of attention. This review thus seeks to examine the extensive empirical literature regarding tax evasion that forms the bedrock for the creation of tax havens and the remedial action of blacklisting those jurisdictions, and the outcome economically and socially.

Definition of Tax Havens and Tax Evasion

There is no universal definition of a tax haven; however commentators have employed both a subjective and an objective approach in determining which nations are tax havens. Under the objective approach, a tax haven is any nation which has no tax or a low rate of tax on all or certain categories of income and which offers a...