foreign country providing significant, permanent tax breaks to individuals and companies operating within it. In a tax haven country, foreigners may receive income or own assets and pay very low taxes. Many companies are situated or have subsidiaries in tax havens for TAX AVOIDANCE reasons. There are two objectives for establishing a subsidiary in a tax haven: (1) a subsidiary can operate as a legitimate operation and generate profits while simultaneously enjoying the tax advantages; and (2) a parent may establish a subsidiary in a tax haven for the purpose of tax avoidance only. The major purpose is to shift income from a country with high taxes to a tax haven country by using a subsidiary as an intermediary.