Should a tax haven be called an attractive or harmful scheme? The Dictionary of the Spanish Language definition leans towards the more innocuous adjective: “A country or territory in which the absence or low level of taxes and financial controls provides an effective incentive for resident foreigners to attract capital from abroad.” According to sources from the However, in the context of the Royal Spanish Academy (RAE) this will soon change. The aim is to eliminate or at least reduce the positive assessment of tax avoidance and tax evasion that is now reflected in the dictionary description.
At a meeting on April 20, the Academy’s Social Sciences Commission decided that the new definition would be aligned with that of the Pan-Hispanic Dictionary of Legal Spanish, which describes a tax haven as “an area characterized by low or no taxation.” . the absence or small number of double taxation treaties and the lack of effective exchange of tax information with other countries”. A text that avoids giving the impression that the tax systems of these jurisdictions and the few or no checks on the flows of money there constitute an entitlement to investments.
Academy sources make it clear, however, that both descriptions, popular and legal, could be retained. The amendment, other sources close to the Institute comment, will be included in the December update and consideration will be given to including the phrase “tax shelter” as synonymous with “tax haven”.
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Three months ago, the platform for tax reform, which brings together associations such as Economists Without Borders, Oxfam Intermón, ATTAC and the unions CC OO and UGT, launched a campaign on change.org entitled “Let the RAE have their say ‘ started by ‘Tax Havens’. In it, he requested that the Academy change the definition of tax haven and use the term “cave” or “sanctuary” instead of paradise.
“We at the Tax Justice Platform regret that the RAE’s current definition seems to defend that zero or very low taxation and avoidance of any financial control is a great goal of economic policy,” the text that accompanies the petition explains , which today has around 31,000 signatures. He adds that the English translation of “tax haven” should not be “tax haven” but rather “haven” or “tax haven”. “In English, these places are more aptly referred to as tax havens, i.e. places of refuge or tax havens,” the text reads. It’s probably a bad translation, confusing Haven with Heaven. The same error is reproduced in other languages such as Italian, French or German.
“We believe it is essential to make citizens aware that defending our fundamental rights requires a determined fight against any type of fraud or tax evasion and the elimination of tax havens. Start by naming and defining them properly,” concludes the petition.
lose millionaires
Tax havens cause millions of dollars in losses to countries’ coffers every year and reduce the resources available to the welfare state. Its high level of opacity makes it difficult to track incoming and outgoing cash flows and to know the real workings of the activities carried out there. On the one hand, they are the preferred destination for corporate, wealthy and illegal corporations to flee their capital. On the other hand, they represent a legal way to lower taxes, known as tax avoidance. Investments in tax havens are allowed, provided stricter controls are observed. It is also important to set up businesses and subsidiaries there and design triangulations to redirect revenue and business benefits to these areas.
The independent organization Tax Justice Network calculates that shifting the profits of corporations and the wealth of the wealthy to tax havens leads to losses of $483,000 million for other countries every year. According to the Missing Profits research study, each year nearly 40% of multinational corporations’ profits – around $1 trillion in 2019 – end up in countries with lax tax burdens or tax exemptions, resulting in a loss of more than $200,000 million in tax revenues. In the case of Spain, the discrepancy is 21,086 million, which is about 5,000 million fewer collections, or 18% of annual corporate tax income.
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