When people deposit their assets offshore rather than in the banks of their country of residence.
What is Capital Flight?
100
A company that owns more than 50% of another "subsidiary" company.
What is a Holding company?
100
The illegal non payment or under-payment of taxes
by making a false declaration or no declaration to tax
authorities; it entails criminal or civil legal penalties.
What is Tax Evasion?
100
Any country or territory whose laws may be used to avoid
or evade taxes that may be owed in another country.
What is a Tax Haven?
100
The practice of seeking to minimise a tax bill by attempting to comply with the letter of the law while avoiding its purpose or spirit.
What is Aggressive Tax Avoidance?
300
A fictional tax which only exists in company accounts and is
never paid.
What is Deferred Tax?
300
A company that has one or more subsidiaries but is itself
owned by another company.
What is an Intermediate Holding Company?
300
A situation in which companies can negotiate their tax treatment in the state in which they have a tax liability.
What is Preferential Tax Treatment?
300
The process of transferring profits from a territory in which
companies would be taxed to another in which there is either no tax or a lower tax rate.
What is Profit Laundering?
300
A term used by tax professionals to suggest getting away
with paying as little tax as possible.
What is Tax Efficiency?
500
When a sale is made to an agent in a tax haven, who then sells on to the final purchaser - but at a different price.
What is Re-invoicing?
500
Residence, Source and Unitary.
What are the 3 bases of taxation applicable to companies?
500
While most of these are ALSO tax havens, these entities host full financial services, including branches of major international banks.
What is an Offshore Financial Centre?
500
Financing a company with a high proportion of loans rather
than shares in order to reduce the business profits of a subsidiary.
What is Thin Capitalization?
500
Charges for goods and services between related legal entities, which should be the same as what an arms-length customer would be charged.
Misuse of this is the major tool for corporate tax avoidance.