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Offshore Banks Secrecy

Bank privacy is a legal principle under which banks are allowed to protect personal information about their customers. They can do this by use of the numbered bank accounts etc. Effective bank secrecy is better achieved in certain countries, such as Switzerland or in tax havens, where offshore banks adhere to voluntary or statutory levels of privacy.

There are a number of reasons to use banking privacy

  • - to hide it from friends, spouse or other family members

  • - to hide it from the employer

  • - to store embezzled money

  • - to launder money

  • - tax evasion

  • - tax resistance

  • - protection from over-bearing or corrupt local government agencies.

  • - protection from litigation

  • - privacy from press or publicity

  • - protection from criminals

  • - protection from solicitation

Offshore banking does not prevent assets from being subject to personal income tax on interest. The personal income tax of many countries makes no distinction between interest earned in local banks and those earned abroad. Offshore banks may decide not to report income to other tax authorities, and have no legal obligation to do so as they are protected by bank secrecy, this does not make the non-declaration of the income by the tax-payer or the evasion of the tax on that income legal.

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