Low tax country
A low-tax country ( English low-tax country ) is when the tax rate in a country is well below the average of the tax rates of other countries. The opposite is the high tax country .
General
The tax haven differs from the low-tax country in that it levies low taxes or special tax breaks as a state goal in order to be an attractive location for foreign economic entities. The low-tax country, on the other hand, is characterized by a tax policy that tends to avoid high taxes in order to only burden taxpayers in an acceptable manner and to prevent tax evasion or tax evasion . It offers tax concessions to attract investors and encourages them on their movement of persons or freedom to exercise and between the competing tax systems to choose. In doing so, they take advantage of the international tax differential , which leads to tax competition . This can lead to relocations in favor of the low-tax countries and to the detriment of the high-tax countries, with the result that tax revenues fall in the high-tax country and increase in the low-tax country. But the low-tax country can also benefit from the export of goods from a low-tax country ( import car ) (sales tax).
Tax evasion is the relocation of sources of income or personal tax attachment points to a low-tax country. This includes states and territories that do not levy any direct taxes , whose tax rates are generally low, as well as those that only tax certain types of income either low or not. This can also include areas that are dependent on other countries and have autonomy in tax matters.
Definition of the external tax law
Low-tax country is one of the central terms for the application of the special taxation, which is subject to persons moving from Germany to a country with lower taxation according to the regulations of the foreign tax law. Which came in September 1972 in force Foreign Tax Act (AStG) goes in his assumption of a low-tax country of § 2 para. 2 no. 1 AStG assume that a low tax jurisdiction exists when the load natural by raised there income tax if the resident unmarried Person who has a taxable annual income of 77,000 euros, is more than a third lower than in Germany or is significantly reduced due to a preferential taxation granted there compared to the general taxation and the taxpayer cannot prove that his income tax there is not at least two thirds of the corresponding German income taxation. The resulting marginal tax rate , below which one speaks of a low-tax country, fluctuates and has been at an income tax rate of approx. 22% over the past few years.
Measurement
From which tax or duty rate a country is considered a low-tax country is controversial. In 2005, Uwe Wagschal came to the conclusion that Germany was not exactly the prime example of a high-tax country for companies. “However, taxation is not low. A middle position in corporate taxation appears… realistic ”. The classification also depends on which key figures are used. There are different results depending on whether the nominal or real tax rates, the tax or contribution ratios or tax relief ( depreciation , loss offsetting ), subsidies ( tax subsidies ) or benefits to taxpayers ( child benefit , allowances ) are taken into account.
The AStG provides an important point of reference for this. According to this, one can speak of a low- tax country if the tax burden abroad for income tax including collectively agreed allowances is more than a third lower than in Germany. The purely income tax reference can also apply to the entire tax revenue .
economic aspects
Already Thomas Robert Malthus wrote in 1821 that the "reduction in taxes a big advantage" is for the living of income taxpayers. In 1936, John Maynard Keynes , in his General Theory of Employment, Interest and Money, warned against excessive taxation of the rich because it would drive them into tax evasion. A trade-off of progressive taxation consists in the fact that above a variable threshold it impairs taxpayers' willingness to perform and can motivate them to tax evasion or tax evasion. Income or wealth millionaires in particular are usually very mobile and relocate abroad.
It is particularly worthwhile for multinational companies to take advantage of the international tax differential. For example, a group company in the high-tax country can supply intermediate consumption or intermediate goods to a sister company in the low-tax country at artificially low transfer prices (taking into account the arm's length principle ), resulting in excessive profit in the low-tax country and too low a profit in the high-tax country. Conversely, a group company in the high-tax country could purchase intermediate consumption from its sister company in the low-tax country at excessive but permissible prices. As a result, an artificially generated profit is achieved in the low-tax country, while the profit is too low in the high-tax country. The tax avoidance strategy of the Double Irish With a Dutch Sandwich ( German two Irish companies with an intermediate Dutch company ) aims as a contract to use Irish and Dutch tax law in such a way that no or only minimal taxes are incurred in the multinational corporation.
The property “low tax country” is an advantage when choosing a location for business start-ups , because corporate taxation is an important location factor . Alfred Weber , according to (1909) the three influence locational factors transport costs , labor costs and agglomeration advantages the choice of location , the transport costs play a central role in the system of Weber. They are the most important factor in determining the optimal location. However, a low-tax country does not necessarily have to be a low-wage country . Countries with special tax breaks ( English tax resorts ) include countries with special discounts for shipping (such as Panama or Liberia ; flags of convenience ). The states with no income, corporation or with only lower income tax burden as Bahamas or Bermuda called tax havens ( English tax paradises ), in the low-tax countries ( English tax shelters such as Gibraltar ) are the income tax rates significantly (20% to 30%) among comparable tax rates the high tax countries (such as Denmark or France ).
What is striking is the considerable under-reporting of the profits declared for tax purposes in Germany, measured against the macroeconomic profit figures as determined by the national accounts. In a study from 2007, the taxation gap in Germany in the corporate sector for 2001 is estimated to be around 100 billion euros ( assessment basis ).
International statistics
Countries with the lowest tax rate (in% of gross domestic product) are considered to be low-tax countries:
| country | Tax rate 2016 in% |
|---|---|
| OECD average | 34.0 |
| Japan | 30.6 |
| Switzerland | 27.8 |
| United States | 25.9 |
| South Korea | 26.2 |
| Turkey | 25.3 |
| Ireland | 22.8 |
| Chile | 20.2 |
| Mexico | 16.6 |
| Australia | 27.8 |
| Iceland | 23.3 |
Mexico is the absolute low-tax country, with a tax rate of less than half the OECD average. Chile, Ireland, Turkey, but also the USA and Switzerland, are still among the low-tax countries. Applying the AStG standard, a low-tax country must have a tax rate of 22.67% or lower (i.e. 2/3 of the OECD average of 34.0%).
The top income tax rate, including regional and other surcharges, was 0% in the Bahamas , Bermuda and Cayman Islands in 2008 . Bulgaria (10%), Russia (13%), Czech Republic (15%), Romania (16%), Isle of Man (18%), Slovakia (19%), Guernsey / Jersey / Singapore (20 each ) had low peak rates %), Estonia (21%), Lithuania (24%) or Latvia (25%). In comparison, Germany was at 47.48%.
Individual evidence
- ↑ Barbara Dehne, Upper and Lower Limits of the Tax Burden in a European Perspective , 2004, p. 157
- ↑ Norbert Andel (Ed.) / Bernd Genser, Problems of Taxation , Volume 3, 1999, p. 15
- ↑ BT-Drs. 16/12028 of February 20, 2009, answer of the Federal Government to a small question , p. 2
- ↑ Uwe Wagschal, Tax Policy and Tax Reforms in International Comparison , 2005, p. 79
- ↑ Thomas Robert Malthus, On the Causes of the Current Trading Blockage , 1821, p. 43
- ^ John Maynard Keynes, General Theory of Employment, Interest, and Money , 1936, p. 314
- ↑ Thomas Meyer, Theory of Social Democracy , 2005, p. 335
- ↑ Steffen Ganghof, Tax Competition , in: Fritz W. Scharpf / Vivien A. Schmidt (Eds.), Welfare and Work in the Open Economy vol. II, 2000, p. 601
- ↑ Lorenz Jarass / Gustav M. Obermair, Fair and efficient corporate taxation , 2015, p. 118
- ↑ Alfred Weber, On the location of industries , first part: Pure theory of location , 1909, p. 16 ff.
- ↑ Setefan Bach / Nadja Dwenger, corporate taxation: Despite high tax rates only moderate revenue , DIW weekly report, No. 5, 2002, p. 63 f.
- ↑ OECD (ed.), Revenue Statistics 1965-2016 , Paris, 2017
- ↑ BT-Drs. 16/12028 of February 20, 2009, answer of the federal government to a small question , p. 4
