Who would want to hurt their pockets to pay taxes? No one would willingly give up a sizeable portion of their income if it weren’t necessary. It’s just that there’s no other way around it— or maybe just for ordinary people.
Rich people know various tax-free havens worldwide where they can get away paying hefty taxes that they might have to pay otherwise. In this article, we will canvass the places where people rolling in money goes to avoid taxes. Let’s get this show on the road!
Eight Places Where Rich People Avoid Taxes
Indeed, there are places where rich people don’t necessarily have (or even want) to pay their taxes. Where are they?
Panama
Panama is a good place to go if you want to save every penny. In Panama, you won’t see many people who have used most of the money they are earning, which is why thousands of people are going to the place to make the most out of their revenue.
Panama charges zero taxes on offshore companies. These companies could go all out doing business with other companies while being based in the country.
As long as the business isn’t operating inside the country, they impose no tax obligation on these silk-stocking individuals. Even the people running the company are exempted from paying hefty tax bills.
The legal tax structure of Panama makes it a pure tax sanctuary. People aren’t contracted to pay corporate taxes, withholding taxes, capital gains taxes, income taxes, general local taxes, or even inheritance taxes.
Panama was popular among wealthy personalities who wanted to bypass paying hefty surcharges. In 2016, a law firm in the country was raided by the police, wherein they found documents that were later called “Panama Papers.” The documents contain a list of influential people all over the globe who uses tax havens for both illegal and legal purposes.
United Arab Emirates
The United Arab Emirates is a go-to place for rich people. They flock to this country to build their homes because it’s pretty easy to avoid paying taxes there.
Starters have a lot of free trade zones that they could take advantage of. Even without paying anything to the government, they can legally trade hassle-free in certain areas and industries, while areas that impose tariffs usually tax at a very low rate.
The undemanding tax structure of the United Arab Emirates makes it more attractive than most people’s home country. Not to mention that there are secret facilities that anyone could go to if they want to avoid hefty taxes. Well, this comes with a price, though.
United Kingdom
It might have never crossed your mind that the United Kingdom is one of the tax havens in the world, but if you would stay there for quite some time, you’ll realize that the country puts the rich at an advantage when it comes to taxes.
The United Kingdom successfully rules the world’s safe havens, taking the world’s riches back with them. Hence, it is not surprising that the country is working the way that profits the moneyed of the world.
While other tax havens only account for 1% of the world’s offshore companies, the UK is home to around 16%. The country lacks financial regulations, so although some truly pay their dues, with such a massive percentage, it’s very likely that thousands of these people just want to live off their wealth by squeezing right in.
Taiwan
We often see Taiwan in the headlines because of its time-hallowed battle against China for its freedom. But aside from fighting for their freedom, they are also fighting for people who do not want to pay regular taxes. Not many people know it, but Taiwan is a massive tax haven for the rich.
Taiwan was labeled as the Switzerland of Asia, providing a comfortable and secure living for its people. It’s pretty easy to live in this country, and many financial benefits come from living there too.
The Taiwan government does not impose taxes on foreigners at all, and since it is not a signatory to the CRS, the government didn’t need to make financial reports on what was happening in the country.
Singapore
This country is famous for being one of the best countries to live in, even though the country’s size is small. Singapore implements safe general laws and has every facility you can think of. Aside from being an idyll, it also serves as a haven for wealthy people who wants to avoid taxes. In fact, it was regarded as the “Grandfather of Tax Havens.”
Singapore incorporates a flat 17% income tax, while other countries have zero percent. With such a big percentage, it would immediately cross your mind that if people would have to pay a significant portion of their income, how in the world did it become a tax haven? The world of loopholes steps in here— there are quite a lot of tax exemptions that support people’s taxes full of that sweet tax-free money.
The country offers a lot of room for people to get away from crazy tax charges, whether a start-up tax exemption or random tax breaks. In addition, since Singapore has a law that allows financial institutes’ records to remain confidential, no one can look into any individual’s financial information.
Luxembourg
Luxembourg is often seen as a murky little island that nobody goes to. But in reality, it was a wealthy country with 35% of its GDP from the financial sector alone.
This country has grown to be so popular for its tax regulations and laws that much of the country’s glamour for outside business is owed exclusively to these features. Luxembourg’s wealth is also partially built around the business earned from its taxation structure.
Luxembourg is a tax haven for the rich because of the business-friendly policies that allow people to set up inexpensive offshore accounts. Moreover, a handful of tax loopholes are out in the open, which anyone can capitalize on.
Banks in this country are also extremely cautious about individuals’ financial records, so as long as you’re making payments as you should, they won’t ever utter a thing to anyone.
Malta
In the early part of the article, we mentioned the Panama Papers, which incorporate a list of people that use tax havens to serve their good. One of the countries that keep popping out in this document is Malta.
Malta’s tax regulation implementation was crazily wild that people call it the “Europe’s Pirate Base for Tax.” Although Malta isn’t legally a tax haven, people can get abundant benefits just by setting up their accounts in the country.
The country imposes an extremely low tax on foreign companies, which is why people flock to the region. They can still be in Europe without needing to pay traditional Europe taxes.
Switzerland
Switzerland used to be a home for anonymous bank accounts. However, even though that is the case, it still serves as a popular tax haven for wealthy people because it has adhered to banking secrecy laws since 1934. Even though Switzerland is working to clear its image, a significant portion of its economy is still dependent on foreign investments.
This land of mountains, chocolate, and fine watches imposes extremely low or no taxes on companies and individuals. Switzerland’s implementation of tax laws has been conspicuously absent because of its long record of hiding funds that dates back to the French Revolution.
