U.S. Views on Offshore Tax Havens

2005 Guide to the U.S. and Mexican Positions on Offshore Tax Havens

U.S. POSITION ON
OFFSHORE TAX HAVENS
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U.S. Position on Offshore Tax Havens. The U.S. views offshore tax havens as follows:

• Offshore tax havens are countries that allow corporations, trusts and other businesses to be established within their territory on the condition that any business they conduct is only with persons who are offshore, meaning with persons who are not citizens or domestic businesses operating inside the country.
• U.S. citizens use offshore banks and businesses to launder criminal proceeds and evade taxes using offshore secrecy laws to hide their assets from U.S. law enforcement.
• The use of offshore tax havens contributes to an estimated $70 billion in lost U.S. tax revenue annually.
• The primary obstacle to enforcement of U.S. tax laws remains the unwillingness of offshore jurisdictions to enter into effective information exchange agreements with the U.S. that would provide the U.S. with access to critically important information in cases involving suspected tax cheats.
• Obtaining information from other countries
  (a) leads to the prosecution of taxpayers for tax evasion, and
  (b) helps to deter taxpayers from attempting to evade tax through entities or accounts in that country.