tax principles

Question 1

what is a special purpose vehicle? (SPV)

Answer 1

• a legal entity, also known as a shell company, created to serve a particular function
• companies may include SPV’s within their corporate structures in order to absorb financial risk or reduce tax liabilities, for instance through registering them in tax havens

Question 2

where are some examples of tax havens?

Answer 2

Cayman Islands
Jersey
Guernsey
Luxembourg

Question 3

what are tax havens?

Answer 3

• they are countries or jurisdictions that offer minimal tax liability for foreign individuals and businesses
• they don’t require businesses to operate outside their country or reside in their country to receive tax benefits

Question 4

what are some examples of companies that benefit from tax havens?

Answer 4

Apple- Apple would have owed the U.S. government $65.4 billion in taxes if tax haven benefits were not used.
Nike- It would have paid $3.6 billion for taxes if the tax haven benefits they use from Bermuda were not used