France will block firms registered in offshore tax havens from claiming aid from government coronavirus bailout, following similar moves by Denmark and Poland...companies either registered, or controlling subsidiaries, in tax havens ineligible for 110 billion euros ($108 billion) rescue package.

Ok. This is how it's actually done.

Tax havens allow anyone to create a company there, without their name appearing on any publically accessible document. For all intents and purposes, the owners are unknown. The CEO and the board are locals you pay to have their names there, and board meetings minutes featuring those names are created and published. The bank account tired to the company is also anonymous, and only you have the credentials to access it.

So say I have a company registered in France. It's quite successful and I want to pay less tax on my profits. So, I can create a company in Malta, without any trace to me. If my expected profits are, say, €500k, I can "hire" that company in Malta for "consulting services" worth €500k. I make zero profits in France, and the money is now in an anonymous account in Malta.

It's not that simple of course, but that's the gist. Usually there are more steps in this process (I pay companies x y and z for services, who in turn pay other companies who in turn etc...)

Until we completely ban doing business with companies registered in a tax haven, and doing business with any company that does business with companies in a tax haven no matter how indirectly, this will continue.

/r/worldnews Thread Parent Link - businessinsider.com