Tax havens

Dmytro Shemelin, attorney at law, Ilyashev & Partners Law Firm, answered the questions of Yurydychna Praktyka on “Deoffshorization trends – strengthening measures to control taxable transactions”.

The notion of low-tax jurisdiction or tax haven is very vague. According to US National Bureau of Economic Research, 15% of countries worldwide can be considered the so-called tax havens. Speaking about offshore jurisdictions in the List of offshore zones by the Cabinet of Ministers of Ukraine, the following tax havens popular in Ukraine can be noted:
– Cyprus, which formally is not an offshore zone. Although Cyprus has recently began to tax income at the rate of 12.5%​​, this rate is still lower than the Ukrainian income tax;
– The Netherlands, which became popular for holding companies due to the large amount of double taxation avoidance treaties;
– Delaware, U.S. state, one of the world’s most popular corporate centers as more than 60% of Fortune 500 companies are registered in Delaware;
– Singapore and Hong Kong, Asian jurisdictions gaining popularity among the Ukrainians after the Cyprus crisis.