INTERNATIONAL TAXATION

COVER PAGE
 SYNOPSIS

SUBJECT:
International Taxation
TOPIC:
TAX HAVENS: BANE or BOON

INTRODUCTION:

Offshore financial centers play the role of tax havens offering composite tax structure and
minimalist legislative and administrative controls that lure of the wealth from the richest of
the world who are seeking safe deposits of their black money which they could move
anywhere in the world as per their wishes without attracting any governmental attention.

Tax havens encourage business corporations and wealthy economic entities to avoid
paying taxes, which leads to substantial revenue losses for governments. Governments of
developing nations in particular, use tax revenues for funding various human
developmental works; sufficient revenue generation from taxes frees developing nations
from the strings tied with foreign aid. The situation becomes worse in view of the fact that
most of the poor nations earn meager tax revenues in view of the low corporate tax rates
(due to the ensuing tax competition among nations for attracting foreign investment) and
trade liberalization, which has practically done away with import taxes (an erstwhile
source of revenue).

While the transnational corporations use their haven wealth to subdue domestic
competition from the companies operating at smaller scale. The offshore global financial
institutions make use of banking secrecy codes and trust services to render a security
blanket over the proceeds of global drug trade, illegal arms trade, fraud, political
corruption and the like. Also rapid movement of portfolio capital (both in and out) in
national economies occurs via offshore financial centers. This makes the domestic
financial markets unstable and volatile.
.This paper aims to study and analyze the effects of offshore tax havens on global and
Indian economy, the policies of government towards offshore banking and how far they
have been successful.

OBJECT OF THE PROJECT:

The project seeks to analyze the effect of offshore banking on economy of a country in
context of globalized economy with emphasis on India .

SPECIFIC OBJECTIVES:
1) To study the development of offshore tax havens.
2) To examine the concept & impact of offshore tax havens in Indian context.
3) To give a possible policy measures which can make tax havens play positive role
in global economic growth.

SOURCES OF DATA COLLECTION:

The project will be consuming primarily the secondary sources ranging from economic
surveys, bank reports, articles and relevant judgments and provisions of law.
RESEARCH TECHNIQUES FOR DATA COLLECTION:

The research techniques will include examination of legislations through surveys, analysis
of working of several offshore financial institutions through questionnaires and relevant
methods.

METHODOLOGY TO BE ADOPTED:

A descriptive and deductive approach will be followed in the project wherein the research
has been conducted by taking certain established laws into account and drawing specific
inferences in the light of the fact situations.

MODE OF CITATION:

A uniform mode of citation shall be adopted and followed consistently throughout this
project. The style of footnoting shall be as per the citation followed at HPNLU Shimla
PROPOSED CLASSIFICATION DURING THE RESEARCH PROPOSAL APPROVAL FOR THE

CHAPTERIZATION:

 Executive Summary
1) About Tax Havens:
a) What are they?
b) Where & How do they exist?
c) What’s the harm they posit?
d) Will they (tax havens) yield to the pressure?
2) International Regulatory framework
3) Indian Perspective:
a) Unique Dimensions of the problem
b) What the Government has been doing?
c) How the Indian courts have tackled the issue?
d) Current Position
 Conclusion and suggestions.
 Bibliography.
BIBLIOGRAPHY:

Books
1) Roy Rohatgi, Basic International Taxation( Second Edition) Vol. I & II 2007, Taxmann
2) Vogel Klaus, Klaus Vogel on Double Taxation Agreements & Tax Laws, 2008, 5th Ed.
Websites
1)Article on international finance
globalization.http://dx.doi.org/10.1080/13569770802550958
2)U.S banking guidelines on due diligence with
OFCs.http://www.occ.treas.gov/handbook/bsa-amlappendixes.pdf
3) R.B.I guidelines in FEMA on setting up of offshore banking
units.http://www.caclubindia.net/books/manual_sez_ftwz_ifsc/Ch%2021.asp
4) Financial services, banking secrecy and money laundering. http://www.amlcft.com/UN
%20ODCCP%20Financial%20Havens%20Banking%20Secrecy%20and%20Money
%20Laundering.pdf
5) Africa’s bane: Tax havens , Capital flight and the corruption.
http://www.realinstitutoelcano.org/wps/wcm/connect/resources/file/ebb9cd4b5ef04b6/WP
12009_Christensen_Africa_Bane_TaxHavens_CapitalFlight_Corruption.pdf?
MOD=AJPERES&attachment=true
6) Offshore: The Dark Side of the Global Economy by William Brittain-Catlin
7) Legal Offshore Tax Havens: How Take Legal Advantage of the IRS Code…
by Jesse Schmitt

BARE ACTS:
1) Income Tax Act, 1961
2) Smugglers and manipulation of foreign exchange manipulation(forfeiture of
property) Act,1976.
3) Narcotic drugs and psychotropic substances Act,1985
4) Prevention of corruption Act, 1988.