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Benedicte Gravrand, Opalesque Geneva: The Panama Papers leak in April, along with the earlier Luxembourg Leaks, the HSBC files and others, repeatedly raised a question that has been waiting to be answered for some time, but especially since Western governments started chasing runaway money to fill empty coffers after 2008. And that question is, should tax avoidance be sanctioned.
Tax avoidance usually comes under the veil of good business practice. Two firms from different jurisdictions forming a joint venture might choose a neutral ground for their legal entity, or the shell. And this ground might as well be an offshore jurisdiction that is light on taxes and politically stable. Investors wishing to protect their assets from rainy days, make investment transactions anonymously, diversify their investments beyond what is allowed at home, might want to pool their money together in funds domiciled in such places too. And the economy of these jurisdictions, whether it be Andorra, Luxembourg, Switzerland, the Bahamas, the Caymans, the BVIs, Panama or else, flourish through the offerings of those services.
What seems a legitimate proposition has one main drawback. There is a fine line between tax avoidance and tax evasion. A shell company in Belize for example, might, for all we know, funnel the proceeds of money laundering, corrupt officials or other frauds, thereby enabling crime and corruption. However, offshore centers claim they are careful with what they take ...................... To view our full article Click here
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