Please do not misunderstand, tax avoidance is paying less tax by legal means; tax evasion is paying less tax by methods that are not legal. We do not help with evasion. 

There is much ill-informed talk about tax havens. Well, every country has to gather money to pay the Prime Ministers’ salary, police, civil servants etc. Each country does this according to its own circumstances and politics. So, there really is no such thing as a tax haven. 

It is our view that what people are referring to when they talk about a tax haven is a place where these circumstances prevail: If you do not live there, or do business there, then you do not pay tax there. There are many to choose from. Let us help you. 

Vanuatu is one place from which to choose where your offshore affairs are to be based. It is a financial centre – not a tax haven, where privacy can be obtained for your legal affairs. Its approach to raising revenues is somewhat different to many other countries, even if only because most of the population is not part of the cash economy. 

The residents of Vanuatu do not pay income tax, or tax on profits – one is a disincentive to work and the other is a disincentive to employ ordinary human beings as workers. Instead the emphasis is on the taxation of consumption. This provides an incentive for individuals to save rather than spend, which is good for the countries’ economy. 

This means that clients with structures in Vanuatu will benefit because there is no income tax, withholding tax, capital gains tax, gift duties, death taxes etc applying to them. There are no tax treaties with other governments and therefore no exchange of information with other governments. For these reasons it is said to be a tax haven. 

Do not consider paying less tax to be somehow disloyal. Most governments provide incentives for investors to pay less tax in the national interest. Let us quote 2 easy examples: 

A) Many governments and corporates issue Eurobonds in a range of currencies. By definition Eurobonds do not deduct tax of any sort from either capital, or interest.

B) To attract investment from overseas New Zealand has what is called an Approved Issuer Levy. Investments approved for this are taxed at a rate of only 2% of the interest paid by the investment. 

For further information or for any questions you may have, please email us at: GTGroup@vanuatu.com.vu. To go back to our articles page, click here.