Tivot Sandwich: Difference between revisions

[[Tivot Sandwich|'''Tivot Sandwich''']] is a base erosion and profit shifting (BEPS) corporate tax tool. This is an accounting and finance term that refers to the legal framework enabling companies to reduce their tax burden. They do this by exploiting the legal framework of [[Tivot]] and - more broadly - the [[United Nations of the Auroran Continent]] more broadly. It was originally developed by Governor [[Eliri Drzevili]] of Tivot following independence from [[Salovia]]. andThey enlisted the advice of [[Edwin Ita]] ofand the[[Kaha Marama]] of [[Ita Marama]] (an audit and accounting agency originating from [[the Oan Isles]]). asIt an adviser towas the governmentvision of TivotDrzevili to helptransform the countryTivot becomeinto a majorglobal financial centercentre.

Originally it built on the core strengths of Tivot as a nation such as political stability, proximity to major markets and its strong transshipment industry. Furthermore, through the [[Auroran Continental Assembly]], the country was able to gain greater access to the markets of the [[Aurora|Auroran]] continent. Although Aurora experienced tumultuous situations namely the [[Auroran-Pacific War]], the treaties and laws of the Auroran Continental Assembly were carried over to the UNAC, enabling the country to become a major financial centre and itin turn cement the Tivot Sandwich. Although other countries have BEPS tools, they do not have the geography, history, politics and, legal system and geopolitical clout to accomplish what Tivot achieved with the Tivot Sandwich.

Following the [[Posolic Wars]], the Grand Republic of [[Salovia]] in 1834 was recognised as an independent and legitimate state. Tivot was a province of this new nation. Thus, Tivot's political and legal systems and economic structure developed in the context of being part of Salovia. Under [[List of Chancellors of Salovia|Grand Chancellors]] [[Mikhail Karanovi]] and (his successor) [[Orev Saloko]], the government of Salovia began rebuilding infrastructure and establishing institutional mechanisms for the functioning of the state. Their policies rebuilt the economy of Salovia. The effect of their policies was felt throughout the nation including in Tivot. Infrastructure such as the Port of Triklov werewas repaired and expanded. Coupled with trade treaties with nations such as [[Ayaupia]], [[Puntalia]] and [[Lapimuhyo]], Tivot became a hub for Salovian trade with the outside world, developing a reputation as a transshipment centre. In becoming a major transshipment centre, the nation laid the foundations to become a major financial centre in the years to follow.

The [[Auroran Imperial War]] broke out in 1970 and lasted until 1975 between the Bursil Accords and the RivendaleRibenstadt Pact. As part of Salovia (which was part of the Bursil Accords), Tivot benefited from the influx of skilled workers, companies and increased trade relatiowithrelations with other Bursil Accords member nations such as [[Great Morstaybishlia]]. Furthermore, most of the action took place far from Tivot, allowing it to remain relatively stable and prosperous. After the Auroran Imperial War, the Tivotian Governor [[Eliri Drzevili]] announced the province's intent to hold an independence referendum on their status. Despite Salovia declaring secession to be illegal, the referendum was held on October 23rd, 1975 alongside [[Blueacia]], and on January 1st, 1976, the nation was founded with the backing of Salovia's rival powers [[Ethalria (Grand Matriarchy)|Ethalria]] and Great Morstaybishlia (despite the fact that they were oneon the same side during the AIW).

Declaring independence allowed Tivot to escape the ravgesravages of the decades-long [[Salovian Civil War]] that ensued shortly after the AIW. In a bid to cement its role as a global financial centre and to disentangle its economic fortunes from the quagmire of Salovia, now-Chief Executive Drzevili, enlisted the help of [[Ita Marama]], an Oan auditing firm to develop the policy mechanisms that would make Tivot attractive to foreign nations. Edwin Ita and Kaha Marama proposed the following policies:

In the process, two classes of tax havens (more accurately known as offshore financial centres or OFCs) emerged: sink OFCs and conduit OFCs. Sink OFCs were the final destinations for shifted profits because of their highly opaque business practices and virtually non-existent tax rates. Countries such as [[Blueacia]], [[Frorkstolm]] and the [[NECRATIESNecraties Islands]] fulfilled this function. However, because the modern financial system was becoming even more complicated and policymakers were wary of these tax havens, many of them struggled to sign the treaties needed to shift corporate tax liabilities easily.

The country maintained a policy of avoiding military, political and economic conflict and maintaining commerce with as many nations as possible, further building its trust. During the [[Auroran-Pacific War]], Aurora was divided between the RivendaleRibenstadt Pact and the Bursil Alliance. To both ensure the neutrality of the [[Auroran Central Bank]] and to protect it from the fighting taking place between Ethalria and Great Morstaybishlia, it was moved to [[Tivot]] where it remained. Despite being nominally part of the Bursil Alliance, the reality was that Tivot was a neutral financial broker. This proximity to the ACJ and the practical neutrality that this created, Tivot banks were able to act as conduits for taxes between warring states, further cementing the relevance and necessity of Tivot as a conduit OFC especially for Frorkstolm and the Necraties Islands which were overseas dependencies of Great Morstaybishlia and were thus subject to embargoes and sanctions by RivendaleRibenstadt Pact member states.

Tivot law shares many of the features of taxation, company and IP law described in the previous section (refer to the section on [[Tivot Sandwich#Overview of taxationtax, company and property law|Overview of taxation, company and property law]] for more information). Tivot's corporate tax rates are some of the lowest in the UNAC and is one of the easiest countries in the UNAC to establish a company. Tivot also protects the privacy of juristic and natural persons, enabling juristic persons to conceal a lot of information about their internal operations, beneficial owners (natural persons who are the ultimate beneficiaries of the company) and financial transactions from the public and foreign governments. Furthermore, the government of Tivot tries to ask as little information from companies as possible.