What are offshore tax havens, how do they work and which countries are on the list? From Andorra to Monaco
THE super-rich have been channelling funds into offshore tax havens for years as certain countries can harbour companies and people looking to cut down on tax.
A staggering number of the wealthy have been revealed as avoiding tax through these schemes - but which countries are on the list and how do the schemes works?
What is a tax haven?
A tax haven is a country that offers foreign people and businesses a minimum tax liability.
This comes with a politically and economically stable environment, with little to none financial information shared with foreign tax authorities.
Those who want to invest in a tax haven don't have to live in the country to benefit from the tax avoidance.
Being a tax haven is beneficial for the host country as well as the companies and people with accounts in them.
It means capital is brought into their banks and helps to form a healthy financial sector.
How do they work?
Countries of jurisdictions have a low-tax or no-tax regime, which can offer generous tax incentives.
The central feature of a tax haven is that its laws and other measures can be used to evade or avoid the tax laws elsewhere.
In September 2013, British Prime Minister David Cameron said "I do not think it is fair any longer to refer to any of the Overseas Territories or Crown Dependencies as tax havens.
"They have taken action to make sure that they have fair and open tax systems.
"It is very important that our focus should now shift to those territories and countries that really are tax havens."
What countries are on the tax haven list?
The list of countries which offer tax havens includes Andorra, the Bahamas, Belize, Bermuda, the British Virgin Islands and the Cayman Islands.
Others are the Cook Islands, Honk Kong, the Isle of Man, Mauritius, Lichtenstein, Monaco, Panama and St Kitts and Nevis.
What are the Paradise Papers?
More than 13 million leaked financial documents, dubbed the Paradise Papers, has shown the Queen's private estate is using an offshore tax haven.
Hundreds of individuals and companies reportedly have their overseas tax affairs laid bare in the papers, including Tory donor Lord Ashcroft and U2 frontman Bono.
Around 13.4 million files are said to have been involved in the leak, which comes one year after the disclosure of the Panama Papers sent shockwaves through the world of business.
Two offshore service providers are said to be the source of the material, which was first obtained by German newspaper Suddeutsche Zeitung.
What famous faces have been named in the papers?
The Queen, Prince Charles and several stars of Mrs Brown's Boys are said to have funds in offshore tax havens.
Now Lewis Hamilton and some of Donald Trump's aids have also been named.
The Duchy of Cornwall said Prince Charles has no direct involvement in its investments, while a spokesperson for the Duchy of Lancaster - who deals with some of the Queen's private cash - said: “We operate a number of investments and a few of these are with overseas funds. All of our investments are fully audited and legitimate."
