The World's Rich 21 Trillion Dollar Wealth Hiding Place

According to British media reports, James Henry, a former chief economist of McKinsey consulting company and a tax haven research expert, pointed out that with the help of private banks, there were about 21 trillion ~32 trillion dollars (about 133 trillion and 930 billion ~204.08 trillion yuan) from various countries to places like Luxemburg, Switzerland, Cayman Islands and Bermuda. The wealth of the rich in his plane, yacht, collection, real estate and other assets is not included.

Of course, the size of the "small coffers" of the global rich, which is based on the authoritative data of the world bank, the International Monetary Fund, the United Nations and the central banks of the world, is still not very precise, even though the two experts, even if they are based on the authoritative data of the world bank, the International Monetary Fund, the United Nations and central banks. However, the McKinsey report undoubtedly shows that the wealth hidden by the rich is far more than we know.

The question is, how did they do it?

　　 tax heaven

The so-called "tax haven" actually refers to those areas and financial institutions whose information is highly confidential, without foreign exchange control, not to bear heavy tax burden and to facilitate tax avoidance.

Take South Korea as an example, according to the data of the Export Import Bank of Korea, since 1968, Korea has invested about 200 million US dollars overseas, and 10% of those in March this year have been attracted to tax haven. British media reported that South Korea has hidden assets in overseas tax havens for up to 779 billion dollars in the past 40 years.

Such a large amount of assets that are not taxed will inevitably make governments jealous. In 2008, the German government spent 4 million 200 thousand euros to purchase a detailed transaction information of 1250 customers from a former data custodian of LGT Bank of Liechtenstein and shared it with the US government. After that, the data custodian sold the same customer data again to the British government for a price of 100 thousand.

With a detailed list of tax evasion, the governments of the Three Kingdoms governments began to investigate and arrest domestic corporate legal representatives and senior managers suspected of evading taxes. Liechtenstein officially accused the German government of carrying out commercial espionage, while the three accused the Liechtenstein government against money laundering in other countries.

Liechtenstein's banks are stinking, but in Switzerland and other countries, the confidentiality of financial institutions still protects customers' information.

In addition to financial institutions, many countries and regions have also become tax haven for overseas enterprises. In the British Virgin Islands, "international commercial companies do not have to pay taxes to the local government. They only pay a very small number of annual fees: the company with a registered capital of less than US $50000 has an annual fee of about $650, and the registered capital is more than $50000, and the annual fee is about $1500."

Here, the procedure of a registered company is very simple. Only a director or shareholder can set up a company, a director or a shareholder has no nationality restrictions, and a company legal representative can also appear. The company does not need to report tax statements. Companies can use any currency in all parts of the world to engage in legitimate business activities.

At present, the Virgin Islands, with an area of only 153 square kilometers, have registered about 40 companies. It has been calculated that the average island has nearly 20 enterprises per resident, and there is a company in the area of a basketball court.

　　 Multinational enterprises low price for employees of the manufacturing enterprise

If the rich have their own multinationals, how to avoid tax is a matter for them to consider.

At the end of July this year, the Sharp Co of Japan was investigated by the Osaka internal revenue service because it had evaded taxes through overseas subsidiaries in 5 years and had evaded taxes. Data released by Osaka's Internal Revenue Service show that in 5 years, SHARP's tax avoidance amount was about 7 billion 400 million yen (about 603 million yuan). SHARP sells products at below normal prices through overseas subsidiaries, and avoids paying more taxes by reducing transaction prices. In the face of the above allegations, there is no specific response from the SHARP side.

SHARP's tax avoidance is transferred pricing.

Transfer pricing refers to the internal price of a group within a multinational company, which is determined by activities such as selling products between the parent company and its subsidiaries, subsidiaries and subsidiaries, providing business, transfer technology and capital lending activities. Transfer pricing covers a wide range. It is a way to avoid tax by making use of the differences in tax rates among countries. Transfer pricing is not only an internal price transfer of goods and services in overseas enterprises, but also can be avoided by other means such as loans, investments, patents and proprietary knowledge, renting, hire purchase, leasing and management costs, labor formalities, etc.

According to statistics, about 60% of the total amount of international trade is formed through the internal trade of such multinational companies. When making the price of internal transactions, multinational corporations often use transfer pricing methods to achieve the goal of reducing tax burden and increasing profits.

This part of tax evasion is difficult to find and investigate if it is not investigated.

　　 Changing corporate form and avoiding tax

Cayman Islands, the fifth largest in the world Financial Center In one building, 19000 companies were registered, and 11% of the eurodollar transactions were delivered here.

Another strategy for tax avoidance is to turn branches into subsidiaries.

Because branches and subsidiaries have advantages and disadvantages, the disadvantages of branches are the advantages of subsidiaries, and the advantages of branches are precisely the disadvantages of subsidiaries.

If a branch is established, the company can not pay capital registration tax or stamp duty; headquarters can directly control its operation, and can reduce the trouble of completing the account forms, auditing items and complying with the company law in the place where the branch offices are located. It can not publish or publish less financial information. In the early days of creation, there will often be more expenses and losses. The tax regulations of the home country generally allow the expenses and losses of the foreign branches to offset the total net profit of the headquarters, thereby reducing the burden of the headquarters income tax.

And set up a subsidiary, the company can first enjoy the tax exemption benefits of equity participation. The share income refers to the share income of the taxpayer in another joint stock company, investment company or partnership enterprise. Local governments usually provide tax exemption or other investment incentives and preferential policies for their subsidiaries. The profits earned by a subsidiary shall not be repatriated to the parent company in the same tax year for tax purposes in the home country. In this way, when the foreign tax rate is lower than the home country tax rate, it can get the advantage of deferred tax. The interest or royalty paid between subsidiaries and headquarters is deductible, that is, from a holistic perspective, the income tax is reduced in this respect than in the branch. Subsidiaries are flexible enough to use tax differences between the two countries (such as transfer pricing) to avoid tax.

in order to tax avoidance Overseas companies will operate in the form of branch offices at the beginning of their business. When branches have accumulated certain experience in operation and management and make profits, they will be transformed into subsidiaries.

In the wake of the gloom of the economic crisis, governments in recent years have stepped up measures to control tax avoidance by overseas enterprises. Anti tax avoidance became a popular term during the London group of 20 meeting in 2009. At the time, it was predicted that with the cooperation of world powers, anti avoidance measures would achieve great results. However, when the road is high, the complexity and concealment of tax avoidance measures will greatly reduce the effectiveness of anti avoidance measures. Tax avoidance, the game of law, which has been playing for thousands of years, will continue.