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Offshore Company Land NewsLetters?

 
 

Why don't the high tax countries just lower their corporate taxes to better compete with the offshore tax havens? 
Staff writer: NetIncorp.com
Sept. 18, 2012


If they did that, then they would put us out of business. So we here hope that never happens. Anyway, the reason they don't lower their tax rate is because they need the money to pay for stuff. Stuff you may need or depend on. Such as, health care, defense, public works, etc. Governments have lots of ways to spend the tax money they receive.

Countries cannot easily change course in terms of tax policy to reduce revenues in the short term for projected gains in the long term (which may never materialize). The corporate tax revenues they have now are used to pay for programs they have to maintain now. They are unwilling or unable to cut these programs due to political risk.

Many of the tax haven countries are small in terms of population and country size. Their tax revenues have to support a smaller number of people as compared to some higher tax nations with significantly larger populations. Therefore, competing on tax rate maybe a losing battle for them.

There are solutions that the high tax countries could implement to reduce the benefits of going offshore or capture some of those revenues going to offshore tax havens. However, they are too busy being upset about the situation and not looking to adjust or innovate. 

They want to keep their corporate tax laws just the way they are and complain about low tax offshore jurisdictions. We assume that they think that high tax offshore jurisdictions are OK since they do not compete for their corporate tax revenue.  

If you have any questions about the above, send us an email.

      


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