Tax haven as a method for tax optimization in holding structures: Tax haven

Abstract

Rapid technological progress and the globalization it has caused have created an excellent environment for business entities, on which they can reach for various legal and economic solutions that will allow them to maximize their profits. Never before in economic history have companies had so many opportunities and tools to operate effectively on every continent. In the paper, the author presents a tax haven as a way to reduce the tax burden of every international corporation, regardless of the industry. She draws attention to the fundamental aspects of the issue of tax optimization using a holding structure. This structure has allowed the world's largest business entities to create such schemes that allowed them to optimize taxes by circumventing taxes (tax avoidance) and sometimes illegally bypassing them (tax evasion). After reviewing the literature, press articles and OECD and IRS reports, the authors describe the mechanisms used by well-known business entities to reduce tax liabilities by creating a holding structure using countries that are tax havens.