Top tax havens for the rich

Offshore tax havens came under fire after the global financial crisis in 2008. Front and center among the countries calling for transparency was the U.S., which made a stand against Switzerland in particular, by demanding release of the names of ultra-rich account holders.

So it might surprise you to learn that the U.S. has done very little to enhance transparency on its own shores and now ranks as the 3rd-most favorable tax haven in a list by Tax Justice Network.

“Though the U.S. has been a pioneer in defending itself from foreign secrecy jurisdictions, aggressively taking on the Swiss banking establishment and setting up its technically quite strong Foreign Account Tax Compliance Act, or FATCA — it provides little information in return to other countries,” according to the report by Tax Justice Network.

Moving up the list, in a bad way
Since 2013, the U.S. has moved up 3 notches to 3rd place in the Tax Justice Network financial secrecy index. Switzerland tops the list, followed by Hong Kong in 2nd place. Although most countries improved since the last index was released, the U.S. remains one of the few to worsen in its ranking, according to Tax Justice Network.

Offshore isn’t illegal, but hiding money is
Offshore accounts in themselves are not illegal and they do serve a purpose. Many times, the ultra-wealthy reside in countries with unstable governments or restrictive inheritance laws. Preserving some of their assets by moving them offshore makes sense.

However, offshore accounts do not exempt U.S. citizens from paying taxes. Secrecy laws by certain territories and countries, including the Cayman Islands and Switzerland, have caused concern among governments that the wealthy use these accounts to avoid paying taxes.

The Tax Justice Network estimates that $21 trillion to $32 trillion in global private wealth is stashed in untaxed or lightly-taxed havens.

Below are the top tax havens on the 2015 index:

Offshore accounts are of little value for most people, even the rich. Here’s how to determine if one is right for you.

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