Vol. 3, Issue 5, Part K (2017)

Abstract
Tax havens are the areas or the countries which impose little or no taxes on the earnings of foreign players in relatively stable economic and political environment, working in a system providing “financial secrecy”. This paper aims to study the impact of Tax Havens globally, how do these actually work and why are they considered legal. In order to avoid tax liability, countries either plan their investment in tax havens or they sign a Double Tax Avoidance Treaties with the countries which enable companies to pay little or no taxes in one country and at the same time avoid paying higher taxes in another country. Mauritius is famous for its zero tax imposition on incomes and India has signed a treaty with this country. This treaty however, is now being amended in order to limit black money and reduce tax avoidance in the system. The Paper also talks about the Panama Papers which showed how wealthy people ranging from Big Politicians to Actors hide their Black money to avoid tax liability. Even one of the biggest corporate governance failures of Enron in 2001 was a result of obscure way in which Tax Havens operate. For this paper, secondary data is used from various journals, articles and newspapers