United States, the new tax haven

  • Posted By : Admin
  • Tax havens
  • 08-04-2018
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Although in numerous occasions we saw how the American giant condemns the actions of Swiss banks and other tax havens, it is paradoxical to observe how slowly but surely the United States in becoming the new tax haven of the moment and how it is transforming into a reference for an offshore sector. 

The new scenario of tax havens

Recent assignments of such territories as Bermuda to new agreements of an exchange of information on financial accounts promoted by the OECD (Organization for Economic Co-operation and Development) has lead into in a new search for confidentiality by the world's great fortunes and as a result the diversion of the capital to certain US states, the new tax haven. Thus, South Dakota and Nevada are witnessing the opening of branches of the leading service providers in tax havens and Swiss financial institutions. Cayman Islands no longer offer the security of anonymity previously sold to customers. However, it should be noted that this transfer of wealth to the United States is not stimulated by tax fraud in the countries of origin, but simply by the fact that for owners of large capitals the confidentiality is synonymous with safety. 

European Fiduciaries move to United States

In this regard, as a general rule, US fiduciaries that are opening their doors to foreign customers and promote confidentiality of bank details, among them the European Rothschild with new headquarters in the city of Reno, claim that they do not work with foreign clients unless they are not completely sure that customers do not have outstanding accounts or due payments with tax institutions in their countries of residence. However, in practice, it may be not entirely assured.

From this point of view, could we say then that the United States is the new tax haven? The large fortunes use the legal services of the new trusts and fiduciaries in the United States to move their money to a place where the disclosure of the name of its beneficial owner is not obligatory. It is logical to think that wealthy families in countries where corruption is prevalent wish to move their capital to a safer region. These families also tend to have children living in the United States.

Leakage of capitals from switzerland

New attempts to control foreign accounts

Unlike the Swiss scandal leaped in 2007, where more than 80 banks, UBS and Credit Suisse included, were sentenced to multimillion dollar fines for helping its clients evade taxes, the picture that draws the United States as the new tax haven is quite different. The incidents that took place in Switzerland were the trigger for a series of measures implemented to restraint these practices of tax evasion. Thus, in 2010, the US government approved the FATCA (Foreign Account Tax Compliance) and, in 2014, most of the OECD countries (except the United States, Bahrain, Nauru, Vanuatu) agreed to take further measures of control and transparency with regard to bank accounts deposited abroad.

The US refusal to OECD initiative has stimulated the capital outflow from Switzerland and other tax havens to the North American country, meaning greater business opportunities for companies established there. This together with the fact that United States lacks the necessary mechanisms to enforce the compliance of foreign tax laws make the region the perfect target to make US the new tax haven of the moment. However, there have been several attempts to create the measures of control of foreign accounts that were rejected in Congress. Remember that it involves not only a tax evasion but also money laundering from illegal activities. Again then, here comes the aspect of a responsibility taken by trust and fiduciaries to ensure that their customers are not committing any illegality, because, otherwise, they themselves would be acting illegally.

For one reason or another, reality shows us how the current scenario points to America as the new Tax Haven.