Delaware : A tax haven

Résumé du document

When typing Delaware in Google, most of the websites suggested are Corporate Expert Agents that all offer the same service: Advising and helping in the establishment of a company in Delaware. This first obvious observation is a proof that Delaware is a desirable State. In this paper, we will see what Delaware's specificities are, why it is often mentioned as a "fiscal paradise" and who profits from these advantages. Let's also bear in mind that the Business Laws are the number one reason for coming to DE; however we will limit our report to the fiscal advantages.

Extraits

[...] There is no general sales tax, but selective sales taxes (excises) are imposed on gasoline (23 cents per gallon) and other motor fuels, cigarettes (24 cents tax a pack) and other tobacco products, alcoholic beverages, amusements, insurance premiums, pari-mutuels, public utilities, and other selected items. Others advantages - There is no state-level tax on real or personal property assessed. - One of the lowest Real Estate Taxes in the USA. It is a real incentive advantage which encourages individuals to live in Delaware.[5] - No Inheritance Tax for most residents. - No Social Security Tax (which is common for Americans but can seem interesting for French) PART III- Who is Delaware's target? [...]

[...] It is a small State and its way to earn money is to make wealth through big corporations settling in DE. On an international scale, DE is considered one of the most attractive places for entrepreneurs to register their business operations. It has liberal company laws and simple company registration procedures with moderate registration fees. Unlike many fiscal paradises Delaware is not targeting wealthy individuals, DE focuses on companies. Moreover they are not interested in the companies' wealth but the small tax they do pay to DE. [...]

[...] Nevertheless, Delaware's reason for attracting businesses is to maintain a competitive advantage and healthy State revenue. Only the franchise tax amount for approximately 20% of its total revenue. Indeed due to its size it is hard to compete with other states, however for over a century they have maintained this amazing revenue. It is earned through incorporation-related revenues.[8] By attracting a great number of companies DE is able to earn money by charging a price for registration that is much higher than the marginal cost for welcoming the companies. [...]

[...] The owner will only need to give the company's name. No other information concerning balance sheet, annual report, is required. The formal general assembly can last 5 minutes and be done alone. (The easiness concerning general assemblies is the reason why NGO's are registered in DE) To sum up, e-shopping should incorporate in Delaware if the owner is interested in paying no Income tax and keeping his accounting secret. Conclusion: After conducting our research we have decided to consider DE as “Fiscally advantaged” State and not a “Fiscal paradise”, its attractiveness is more expanded in Jurisdiction, we should maybe talk about a heaven”. [...]

[...] Non off-shore activities - The corporate income tax is a flat rate of The franchise tax is very low. The annual franchise tax ranges from a minimum of 75$ to a maximum of 180,000$, it is calculated according to the number of authorized shares in the company (the minimum applying to companies with 5,000 or fewer shares). For corporations having no par value stock the authorized shares method will always result in the lesser tax. 5,000 shares or less (minimum tax) 75$ 5,001 - 10,000 shares - 150$ each additional 10,000 shares or portion thereof add 75$ maximum annual tax is $ For Example: - A corporation with shares authorized pays 225$ (150 plus 75) - A corporation with shares authorized pays 825$ (150 plus 675 [75 x Other advantages - There isn't any minimum equity contribution to create a firm. [...]