Definition

Noun: A country or independent region that imposes very low or no taxes on individuals and businesses from other countries, attracting them to establish residency or legal entities there to reduce their overall tax burden.

Usage

A "tax haven" is used to describe a jurisdiction with favorable tax laws designed to attract foreign capital and financial activity. It is a neutral geographic/economic term, though it often carries connotations of legal tax avoidance or, in some contexts, illicit tax evasion.

Examples

• Many multinational corporations have subsidiaries in a tax haven to optimize their global tax strategy.
• The small island nation became known as a tax haven after it abolished corporate income tax.
• Investigative journalists revealed how the wealthy used offshore accounts in a tax haven to shield their assets.

Advanced Usage

• "to be deemed a tax haven": To be officially classified or considered as such by an international body or another country's government.
  • The jurisdiction was deemed a tax haven by the European Union's new blacklist.
• "to operate as a tax haven": To function with the primary economic characteristic of attracting non-resident financial activity through low taxes.
  • While not its only industry, the territory largely operates as a tax haven.

Variants and Related Words

• Offshore financial center: A more formal and less politically charged term often used interchangeably with "tax haven," though it may emphasize the provision of financial services to non-residents.
• Secrecy jurisdiction: A term used by critics to emphasize the lack of financial transparency and banking secrecy laws in some tax havens.

Synonyms

• Offshore jurisdiction
• Low-tax jurisdiction

Related Concepts (Not Direct Synonyms)

• Tax avoidance: The legal use of tax laws (including using tax havens) to reduce one's tax liability.
• Tax evasion: The illegal non-payment or underpayment of taxes.
• Shell company: A non-operating company often registered in a tax haven to hold assets or facilitate financial transactions.

Noun

1. a country or independent region where taxes are low