'''New ranking reveals corporate tax havens behind breakdown of global corporate tax system; toll of UK’s tax war exposed…
Researchers call for new tax rules to “tax corporations where employees work, not where ledgers hide”
Decades of tax wars among the world’s richest countries are unravelling the century-old global corporate tax system, new research finds. Forty per cent of today’s cross-border direct investments reported by the IMF – $18 trillion in value – are being booked in just 10 countries that offer corporate tax rates of 3 per cent or less.
The Corporate Tax Haven Index, published today by the Tax Justice Network, has identified the UK and a handful of OECD countries as the jurisdictions most responsible for the breakdown of the global corporate tax system – with the UK bearing the lion’s share of responsibility through its controlled network of satellite jurisdictions. These countries have aggressively undermined the ability of governments across the world to meaningfully tax multinational corporations. An estimated $500 billion in corporate tax is dodged each year globally by multinational corporations1 – enough to pay the UN’s under-funded humanitarian aid budget 20 times over every year.2
The research captures a global corporate tax war waged by the UK through its network of satellite jurisdictions across the world. The data also reveals an aggressive annexation of low income countries’ tax rights by the UK and OECD countries including France and Sweden.
The top 10 most corrosive corporate tax havens in the world
The first ever study of its size and scope, the Corporate Tax Haven Index3 ranks countries by their complicity in global corporate tax havenry. The index scores each country’s tax system based on the degree to which it enables corporate tax avoidance. Each country’s corporate tax haven score is then combined with the scale of corporate activity in the country to determine the share of global corporate activity put at risk of tax avoidance by the country. The greater the share of global corporate activity jeopardised by the country’s tax system, the higher it ranks on the index.
The Corporate Tax Haven Index complements the Tax Justice Network’s Financial Secrecy Index, which ranks countries by their contribution to global financial secrecy with a focus on individuals, as opposed to multinational corporations.
The top 10 countries that have done the most to proliferate corporate tax avoidance and break down the global corporate tax system are:
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British Virgin Islands (British territory)
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Bermuda (British territory)
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Cayman Islands (British territory)
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Netherlands
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Switzerland
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Luxembourg
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Jersey (British dependency)
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Singapore
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Bahamas
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Hong Kong
These 10 jurisdictions alone are responsible for over half (52 per cent) of the world’s corporate tax avoidance risks as measured by the Corporate Tax Haven Index. Over two fifths of global foreign direct investment4 reported by the International Monetary Fund is booked in these 10 countries, where the lowest available corporate tax rates averaged 0.54 per cent. The top three ranked jurisdictions are part of the British-controlled network of satellite jurisdictions to which the UK has outsourced some of its corporate tax havenry.
The top 10 jurisdictions have dealt the global corporate tax system a devastating double blow. First, the colossal scale at which the jurisdictions have enabled corporate tax avoidance risks to woo multinational corporations has made countries’ statutory corporate tax rates meaningless. Second, the jurisdictions have triggered a ‘race to the bottom’ across the globe that will further deplete tax revenues as countries desperate to claw back foreign investment engage in the false economy of ‘tax competitiveness’ and increase their complicity in corporate tax havenry. The corporate tax avoidance risks and corrosive lose-lose outcomes documented by the new index illustrate that what is often referred to as ‘tax competition’ is more aptly described as ‘tax war’
https://www.taxjustice.net/2019/05/28/new-ranking-reveals-corporate-tax-havens-behind-breakdown-of-global-corporate-tax-system-toll-of-uks-tax-war-exposed/