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Tracking Down Tax Havens


Tax Haven Roadmap
Richard Czerlau
Uphill Publishing, 1995, 422 pp, $19.95, ISBN 0-9698-432-2-4

Reviewed by Mark Leger

You've just found out that the wealthiest businessman in town is setting up a tax haven in the Cayman Islands. You've been assigned to write a story about what he's up to, and you know next to nothing about tax havens. Your subject, not surprisingly, isn't about to help you.

This is when Richard Czerlau's Tax Haven Roadmap comes in handy. It's a guide to setting up tax shelters around the world. Czerlau, who has a background in financial services, spent four years researching and writing this book. It's for disenchanted businesspeople, but is just as useful for reporters.

According to Czerlau, a potential tax haven is one which exhibits one or more of the following: no tax or a low tax is imposed; high level of bank and commercial secrecy; banking and other financial services are important to the country's economy; excellent transportation, communication and transportation facilities; lack of currency controls on foreign deposits of foreign currency; and promotes itself as a tax haven or an offshore financial centre.

After general information about tax havens and how to set them up, Czerlau discusses why the reader should set up a tax shelter. A true libertarian, he rails against the evils of high taxes. He also cautions unsuspecting entrepreneurs about unscrupulous individuals who launch frivolous lawsuits to bilk a businessperson of his, or her, hard-earned cash. To illustrate his point, Czerlau reminds us of the woman who sued McDonald's after she spilled hot coffee on her lap. Czerlau's musings might inspire businesspeople unsure about the usefulness of a tax shelter, but they are not of much interest to a journalist on deadline.

A reporter is most likely to find the second half of the book useful. There, Czerlau provides detailed information about setting up tax shelters in 24 countries. He begins with an overview of each country's history, then proceeds to answer a series of questions any businessperson would ask before deciding whether a given country is a suitable tax haven.

The first question is an important one because every entrepreneur wants to be protected from reporters, Canadian tax collectors and greedy consumers looking to make a quick buck off a lawsuit: "Does Anguilla have a secrecy law?" to take Anguilla for example. There are two natural follow-up questions: "Is there any situation where bank secrecy can be lifted?" and "Can foreign tax authorities obtain information on Anguillan bank accounts?"

The next series of questions is based on the country's tax system: "Is there an income tax in Anguilla?;" "Are there any other taxes in Anguilla?;" and "Is there a tax treaty between Canada and Anguilla?"

At the end of each country profile, Czerlau lists a number of financial institutions and other useful contacts, including banks, government departments, management services and law firms. Because there are strict secrecy laws in most countries, these contacts wouldn't be useful to a journalist looking for information about a specific business. But they might be useful for more general information about a country's tax structure.

There is nothing in this book that will help you to get the businessman to talk about the details of his own tax shelter. Unless you have concrete proof, he probably won't even admit he has one. But it's a useful starting point and reference tool for reporters who don't know much about the nuances of tax shelters around the world. Who knows, you might even decide you want to build one yourself.


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