Connecticut General Statutes Title 12. Taxation § 12-218f. Combined group determined on world-wide basis, affiliated group basis or water’s-edge basis. Tax havens

(1) Any member incorporated in the United States, or formed under the laws of the United States, any state, the District of Columbia, or any territory or possession of the United States, excluding such a member if eighty per cent or more of both its property and payroll during the income year are located outside the United States, the District of Columbia, and any territory or possession of the United States;

(2) Any member, wherever incorporated or formed, if twenty per cent or more of both its property and payroll during the income year are located in the United States, the District of Columbia, or any territory or possession of the United States;

(3) Any member that is incorporated in a jurisdiction that is determined by the commissioner to be a tax haven as that term is defined in subdivision (4) of this subsection, unless it is proven to the satisfaction of the commissioner that such member is incorporated in a tax haven for a legitimate business purpose; or

(4) For purposes of subsection (a) of this section and subdivision (3) of this subsection, “tax haven” means a jurisdiction that (A) has laws or practices that prevent effective exchange of information for tax purposes with other governments on taxpayers benefiting from the tax regime; (B) has a tax regime which lacks transparency; (C) facilitates the establishment of foreign-owned entities without the need for a local substantive presence or prohibits these entities from having any commercial impact on the local economy; (D) explicitly or implicitly excludes the jurisdiction's resident taxpayers from taking advantage of the tax regime benefits or prohibits enterprises that benefit from the regime from operating in the jurisdiction's domestic market; or (E) has created a tax regime which is favorable for tax avoidance, based upon an overall assessment of relevant factors, including whether the jurisdiction has a significant untaxed offshore financial or services sector relative to its overall economy. “Tax haven” does not include a jurisdiction that has entered into a comprehensive income tax treaty with the United States, which the Secretary of the Treasury has determined is satisfactory for purposes of Section 1(h)(11)(C)(i)(II) of the Internal Revenue Code.