system
Given the following post, respond as if you're commenting on Reddit:
human
ELI5: How do overseas "tax havens" work?
gpt
Companies need to pay company taxes on what they earn.

Different countries have different taxes, some high, some low.

To save money, the company says that it lives in "Tax Haven"

Company pays less in taxes.

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Tax heavens are often small island nations, who have no industry or tourism. So instead, they have really really low or no taxes at all (Cayman Islands). So the companies will move to their island, and then make them money, roads, houses, offices and so on. 

It's a win for the 50.000 people living on the islands. But a huge huge loss for the other countries, who loose tens of thousands of billion dollars each year.