What is a tax hiding place?

Tax shelter is an investment with deducts of taxes and tax advantages of greater value than the investment itself. The specifics of what the tax hiding place depends on the local tax authority and differs between countries. Examples of common tax hiding are examples of common tax shelters. At the corporate level, the use of the tax shelter requires the expertise of the Tax Code. However, even professional accounting companies do not always correct. After the US bear market in 2000-2002, regulatory bodies revealed extensive abuse of tax shelters. Arthur Anderson, at that time, the main accounting company, was dissolved for its role in the help of companies like Enron and Worldcom Evade Latne. Managers in such companies found themselves in a criminal court faced with a lengthy prison. The government often intentionally create a tax hiding place that supports investments in specific economic sectors. For example, during the energy crisis in the 70s of the 20th century, many governments have created tax hiding in order to encourage investments in alternativeTive energy sources such as windmill farms, solar energy and vehicles powered by ethanol. Tax shelter incentives can be so strong that the entire industry can be created seemingly outside the thin air. In Brazil, the Tax Act 80 was supported by an investment in Ethanol vehicles so strongly that virtually every car sold in the country was powered by ethanol.

The most commonly used tax shelters are those used to support savings in Western countries. Individual pension accounts (IRA) in the US and registered savings plans (RSP) in Canada are examples of widely available, easy -to -understand tax shelters. Annuity, generally offered by banks and insurance companies, can also be structured as a tax hiding. While tax hiding frauds are most often associated with corporations, individuals abusing annuity and trusts can also be charged with tax evasion.