Offshore Banking

An offshore bank is a bank located outside the country of residence of the depositor, typically in a low tax jurisdiction that provides financial and legal advantages.

 The term Offshore Banking applied to banking transactions conducted between participants located outside the country.
One common misconception is that offshore banking can legally prevent assets from being subject to personal income tax on interest. Except for certain persons who meet fairly complex requirements, this is incorrect as the personal income tax of most countries makes no distinction between interest earned in local banks and those earned abroad. Persons subject to US income tax, for example, are required to declare on penalty of perjury, any offshore bank accounts they may have. Although offshore banks sometimes do not report income to other tax authorities this does not make the non-declaration of the income or the evasion of the tax on that income legal in most jurisdictions.