The Expatriate Corp/Foreign Haven act or HB 3419 introduced on February 9 by Rep. Jaime M. Andrade, Jr. in the Illinois General Assembly has drawn concern from some business leaders, a few Caribbean and other international leaders for listing them as tax havens.
Tax Havens are defined as jurisdictions with: no tax, or very low rates of taxation; strict bank secrecy provisions; a lack of transparency in the operation of its tax system, and a lack of effective exchange of information with other countries.
Those making the list from the Caribbean on HB 3419 are:
- Antigua and Barbuda
- The Bahamas
- The British Virgin Islands
- Cayman Islands
- The Turks and Caicos Islands
- Netherlands Antilles
- St. Kitts and Nevis
- St. Lucia
- St. Vincent and the Grenadines
- U.S. Virgin Islands.
Any company that has incorporated in any of these nations would be considered an expatriate corporation under the bill, which calls on the Illinois Investment Policy Board to create a list of expatriate corporations to include in the state’s rolls of “restricted companies.”
When the list is finished, it will be provided to the Illinois’ state pension funds, which will in turn have 12 months to get rid of any direct holdings in any company that is on the list of restricted companies.
The bill has been referred to the Rules Committee and assigned to the State Government Administration Committee in the Illinois State Senate. There were two short debates on the bill last month and on April 5th, the bill picked up 19 co-sponsors. Under current law, the Illinois Income Tax Act taxes U.S. companies only on their domestic income derived from Illinois business activities but not on foreign income.
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