Lifestyle

15 Countries Where You Can Legally Avoid Your Taxes

Published On 04/14/2015 Published On 04/14/2015

Complaining about paying your taxes is as American as apple pie, or our inability to locate most countries we've had wars with on a map. But outrightly not paying or cheating your way out of what you owe the IRS is a bad idea, just ask Wesley Snipes. Or Lauryn Hill. Or Nicolas Cage. Or...seemingly every other B-list celebrity.

However, if you're really serious about selfishly not paying your share and prefer not to go to jail, there are plenty of countries to stash your cash where tax laws are, shall we say, user-friendly. With that in mind on this, the eve of the year's filing deadline, here are the world's 15 most notable tax havens*.

(*As deemed by the Tax Justice Network's Financial Security Index, which ranks jurisdictions based on their level of permitted financial secrecy and scale of activity.)

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15. Guernsey

Personal taxes: No tax on capital gains or inheritance, and a tax cap of only $380,000 on worldwide income
Corporate taxes: Most business pay 0%, and the few that do are liable for just 10%
This small British territory in the English Channel accounts for roughly one percent of the global market for offshore financial services, yet Prime Minister David Cameron has gone on record claiming it's unfair to refer to it as a tax haven. Though, considering that most companies incorporated there pay 0% corporate tax, and no official company details are kept on record, it seems like more than a fair assessment. [See more]

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14. Bermuda

Personal taxes: No income, capital gains, or wealth taxes
Corporate taxes: 0% for most, in addition to a very generous exemption policy
If you love beautiful beaches and money laundering equally, meet your new pal Bermuda. It has one of the highest secrecy scores on the list, and does not comply with international anti-money laundering standards. It's also a hot spot for big U.S. companies, considering that as of 2013, 64% of Fortune 500 companies had a subsidiary set up there, or the Cayman Islands, which you'll find a little further down on this list. [See more]

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13. Bahrain

Personal taxes: None levied on income, estate, or capital gains
Corporate taxes: None levied on most, with the exception of some oil and gas companies
Seen as having one of the freest economies in the Middle East, Bahrain's is popular amongst the oil-monied masses in the region. Among other questionable practices, it doesn't require residents to report payments made to non-residents. [See more]

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12. Malaysia (Labuan) 

Personal taxes: No estate, gift or net worth taxes, and non-residents are subject to taxes on income earned in Malaysia
Corporate taxes: Only income earned in the country is taxes (except for banking, shipping, and insurance companies)
The Malaysian island of Lebuan has become a popular spot to dock money since big governments started cracking down on the old standby havens (looking at you, Switzerland). A lack of regulation that includes having no databases for public trusts or foundations are just a part of why nearly 7,000 offshore companies from 85 different countries have registered there as of a few short years ago. [See more]

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11. Panama

Personal taxes: Nonresidents and residents are subject to income taxes on money earned in the country
Corporate taxes: Only liable on income that arises in the country, 
As if the tropical climate weren't enough of a draw, Panama's lax tax setup in which 50% of international investments are not taxed at all, may convince you to consider moving at least your money there. [See more]

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10. Japan

Personal taxes: Estate, gift, and relatively steep income taxes are all levied on residents. Non-residents are subject to taxes only on income earned in the country
Corporate taxes: Non-resident companies (those not incorporated or headquartered there) pay taxes only on income earned in Japan 
While it has laws that make its financial services significantly less secret than many of the others on this list, Japan's less-than-strict rules on money-laundering and tax-free treatment of many types of foreign investment earn it a place anyway, especially considering it's the world's 4th largest economy. [See more]

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9. Jersey

Personal taxes: No wealth or estate taxes, and nonresidents are liable for only Jersey-source income
Corporate taxes: The general rate is 0%, with some exceptions for certain financial institutions
Quite a distance from the home of Springsteen and Chris Christie, this island in the English Channel is not far from aforementioned Guernsey, and is similarly a territory under the British Crown. It's earned the nickname Treasure Island thanks to incredibly loose tax regulations that have attracted the roughly $2 trillion in personal wealth from around the world housed there. [See more]

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8. Germany

Personal taxes: Liable for taxes on capital gains and income, with a cap of 45% on the latter
Corporate taxes: Nonresident companies are subject only to 15% tax on income derived within Germany
For a country legendary for its attention to detail, Germany seems to intentionally keep one eye closed on the tax front. Not only has it come under scrutiny for its less-than-militant anti-money laundering policies, but it also maintains a "fragmented, low-tech, and under-resourced approach to collecting tax, especially from wealthy." It's no wonder that records from just a few years back indicate it hosted nearly $2 trillion in deposits from non-residents. [See more]

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7. Lebanon

Personal taxes: Inheritance and gift taxes, as well as tax on gross income up to 21%
Corporate taxes: Companies registered there are subject to a 15% flat tax
Despite the incredible political upheaval and violence that's marred the country over the course of the last century, Lebanon has maintained its status as a finance center for the region. It's no wonder, either, considering it's known to have one of the least transparent financial systems in the world. [See more]

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6. United States

Personal taxes: Estate, gift, and net gains taxes are levied at graduated rates, and both permanent residents and resident aliens are subject to taxes on all income (no matter where earned), at a rates up to 39%
Corporate taxes: With certain exceptions, companies may be taxed up to 39% on worldwide income
Don't be too shocked to see good 'ol 'Murica on here. Considering we have the world's second largest economy, allowing even the slightest amount of wishy washy treatment of foreign (and domestic) investments is significant. The state of Delaware itself is essentially a domestic tax haven, where a low tax rate and an exceptionally pro-business legal environment have attracted more businesses than there are people. [See more]

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5. Singapore

Personal taxes: Capital gains are not taxed, and only income earned in the country may be taxed, at a rate that does not exceed 20%
Corporate taxes: No capital gains tax, and the standard rate for corporate income tax is 17%
As one of the fastest growing wealth management capitals in the world, Singapore is on track to overtake Switzerland as the globe's largest offshore wealth center by 2020. Though it's fiercely attempted to shed its image as a tax evasion mecca in the past, it's telling that gleaning much info at all about its offshore finance sector has proven nearly impossible. [See more]

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4. Cayman Islands

Personal taxes: No income or capital gains tax on either citizens or non-residents
Corporate taxes: No taxes on income, profits, gains, or wealth, but annual licensing fees are charged for a particular set of businesses
Surprise! Another British-affiliated territory makes the list. It's made great strides to distance itself from its sordid history steeped in drug smuggling and money laundering, but the Cayman Islands remain a remarkably reliable country for corporations looking to bank on their low-touch regulation. No wonder its home to over 200 banks, 140 trust companies, and 90,000+ other companies. [See more]

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3. Hong Kong

Personal taxes: No estate or capital gains, but income is subject to a salaries tax of up to 17%
Corporate taxes: Profits derived in Hong Kong by businesses based there are subject to a tax of 16.5%, unless they can prove their central management is not centered in the country
Hong Kong's success as a booming global financial center is owed in large part not only to its close proximity to China, but also a spectacularly laissez-faire financial environment (incredibly low tax rates and very solid secrecy laws) that exceedingly draw in foreign wealth. [See more]

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2. Luxembourg

Personal taxes: Income taxes on residents (and non-residents with income derived there) are progressive, with rates capped at a whopping 43.6%
Corporate taxes: Nonresident companies are subject only to tax on income derived from sources in the country
It may be one of Europe's tiniest countries, but Luxembourg is a behemoth when it comes to popular places for major corporations to park huge chunks of their money. Companies like Apple, Amazon, PepsiCo, and Heinz all have addresses in the country, whose total population is barely half a million people. However, if the U.S. and others have their way, the heady days of Luxembourg's lax tax laws may be numbered. [See more]

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1. Switzerland

Personal taxes: No net wealth tax, and limited capital gains taxes. Income taxes are levied at the municipal, state, and federal levels, though no average rate can be calculuated due to the incredibly complex and multi-layered setup.
Corporate taxes: Taxes are levied at both a local and federal level, the latter at a flat rate of 8.5%
Okay, you saw this one coming. Switzerland's combination of strict secrecy laws and political stability make it one of the most desirable locations for both individuals and corporations looking to dodge both taxes and attention. Heads up though, they've recently caved to some serious international pressure to play by the rules. [See more]


Joe McGauley is a senior editor at Supercompressor. His offshore accounts are so secret they don't even exist.

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