Tax evasion is once again becoming a hot topic of debate among government officials all over the world. As it turns out, there are quite a few tax shelters which welcome any wealthy individual with open arms. Governments are only making matters worse by slashing corporate tax rates, though. On the same topic, Bitcoin is not a viable currency to evade taxes either, so don’t even try it.
Tax Shelters Are Damaging To The Economy
As one would come to expect, specific regions around the world are offering incentives that make it easier for corporations to dodge significant taxes. Interestingly enough, The Netherlands is in the top three of these regions, something very few people would expect. The other two countries are Bermuda and the Cayman Islands, which will not surprise anyone.
Oxfam voiced their concerns over these tax havens,m and how they are “starving countries out of billions needed to tackle inequality”. Large corporations have a history of not paying [enough] taxes despite making incredibly large profits. Apple is a great example of doing so, as they only paid 0.005% tax on global profits.
But that is not the only disconcerting aspect. Oxfam went as far as stating how nearly 90% of the world’s largest companies have a presence in one of these three tax havens. That is not surprising either, as all major companies want to establish a presence on an international scale. The Netherlands is Europe’s go-to destination, although it seems there are darker reasons behind this strategy.
Despite the best efforts by the European Union, G20 and OECD, removing corporate tax loopholes is virtually impossible to achieve. A lot of work still has to be done before tax evasion can be brought to a halt, that much is certain. Companies should be forced to pay their fair share of taxes, instead of shifting that burden on to consumers, who are already struggling to make ends meet.
On the topic of tax evasion, Bitcoin has often been mentioned as a facilitator to launder money and avoid corporate taxes. So far, there is no credible evidence to back up any of these claims, nor is it unlikely that will ever appear. In fact, Bitcoin is a more transparent form of transferring value all over the world compared to anything else.
Moreover, given the small market cap Bitcoin has right now, it is unfeasible to make corporate-level tax evasion possible, to begin with. There is not enough market liquidity to do so, and with transactions broadcasted to the entire world in real-time, there is no incentive to use Bitcoin for these types of practices either.
Header image courtesy of Shutterstock