Volume 39 (2011) / Issue 4

Diego Quiñones Cruz, 'Whirlpools and Sea Monsters: Navigating Tax Havens' (2011) 39 Intertax, Issue 4, pp. 178–194


Tax havens are one of the main areas of concern in contemporary tax policy, especially in these times of strenuous budgetary tension and outrageous tax fraud scandals. This article analyses the nature of tax havens and reflects on contemporary tax policy experiences in order to argue in favour of a definition based on the elements of secrecy and intent to escape tax burdens coupled with an examination of tax systems, services provided, functional structure, and the jurisdiction's attitudinal display. Having identified traditional conceptions of fiscal sovereignty, lack of medium- and long-term strategies, and ignoring the demand side of the equation as hurdles that prevent real progress, this article is concluded by formulating a series of tax policy recommendations that emphasize the importance of combined flexible conditionality-multilateral efforts to articulate the interests of the four main actors involved in tax havens (tax haven jurisdictions, users, financial intermediaries, and tax residence jurisdictions that are trying to recover revenue) in a network of cooperative strategies that provide: (1) economic substitution alternatives, (2) improvements of domestic tax systems so as to bolster legitimacy and reduce tax haven demand, and (3) which seek to attack societal complacency with tax fraud.

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ISSN: 0165-2826
ID: TAXI2011021