|
|
 |
| Homepage
> Tax > |
Offshore banking (Page 1 of 3) |
Offshore banking has often been associated
with the underground economy and organized crime, via tax evasion
and money laundering; however, legally, offshore banking does not
prevent assets from being subject to personal income tax on
interest. Except for certain persons who meet fairly complex
requirements , the personal income tax of most countries makes no
distinction between interest earned in local banks and those earned
abroad. Persons subject to US income tax, for example, are required
to declare on penalty of perjury, any offshore bank accounts--which
may or may not be numbered bank accounts--they may have. Although
offshore banks may decide not to report income to other tax
authorities, and have no legal obligation to do so as they are
protected by bank secrecy, this does not make the non-declaration of
the income by the tax-payer or the evasion of the tax on that income
legal. Following September 11, 2001, there have been many calls for
more regulation on international finance, in particular concerning
offshore banks, tax havens and clearing houses such as Clearstream,
based in Luxembourg, being accused of being a crossroads for major
illegal money flows.
An offshore bank is a bank located
outside the country of residence of the depositor, typically in a
low tax jurisdiction (or tax haven) that provides financial and
legal advantages. These advantages typically include some or all of:
* Strong privacy
* Less restrictive legal regulation
* Low or no taxation (i.e. tax havens)
* Easy access to
deposits (at least in terms of regulation)
* Protection
against local political or financial instability
While the
term originates from the Channel Islands "offshore" from Britain,
and most offshore banks are located in island nations to this day,
the term is used figuratively to refer to such banks regardless of
location (Switzerland, Luxembourg and Andorra in particular are
landlocked).
What type of services are available from
offshore banks? The same as the services from any high street bank,
plus the extremely confidential Swiss style numbered accounts. Many
of the offshore banks listed on this site are respected AA credit
rated international banks, that everyone has heard of before. They
have simply set up an offshore division or branch division within a
tax haven to attract a share of the enormous international trade,
and offer almost the same services as any domestic bank. Such as the
following:
* Personal and corporate current/checking
account
* Personal and corporate savings accounts
* Secure internet banking facilities
* Anonymous numbered
accounts (extremely confidential)
* Debit and ATM cards,
which are accepted globally
* Credit cards
* loans
* Mortgages
Going offshore in simple terms means placing
your savings, investments, assets or business concerns outside of
your home country, within one of the many tax havens. A tax haven is
a country that has very favourable tax advantages, which means that
your savings, investments, assets or business profits can grow free
of almost any taxation. Although taxation is only one reason why
many decide to go offshore.
|
|
|
|
