Fair Tax Foundation updates list of tax havens
*Please note, we have updated our list of tax havens since this article was published and links have been updated. Bahrain has been added to our list, making the total number of tax havens 72*
The growth of tax havens and unethical corporate tax conduct have become prominent concerns across the world. Across the globe, close to 40% of multinational profits (US$970bn) are artificially shifted to tax havens each year, leading to a US$250bn reduction in corporate income tax revenue.
The Fair Tax Foundation has updated our list of tax havens. Spoiler alert: they total 71 jurisdictions, and you won’t find warm beaches and palm trees in many of them.
The Fair Tax Foundation uses its list of tax havens as a prompt for discussion with clients who are progressing accreditation, data analysis consideration and as a guide for areas where extra narrative explanation may be merited in public reporting.
So, how do we decide what is, and isn’t, a tax haven? A tax haven is traditionally defined as a jurisdiction that offers favourable tax treatments to non-residents. This obviously includes various low corporate tax rate jurisdictions, such as the Cayman Islands, but three other characteristics need to be factored in as well:
Jurisdictions that allow businesses to be incorporated with little or no public transparency on beneficial ownership or financial reporting are problematic, and often act as hubs for illicit financial flows – eg, the United Arab Emirates.
2) Harmful tax incentives
Some tax havens operate decent headline tax rates, but offer aggressive tax incentives that undermine these and encourage offshore structures and profit shifting, without the need for any genuine economic activity – eg, Russia and Barbados.
3) Un-cooperative jurisdictions
A lack of international cooperation on baseline good practice, especially on information sharing between tax authorities, acts as a break on efforts to counter money laundering and tax evasion – eg, The British Virgin Islands.
Read more on the background of tax havens and see the full list in our updated tax havens paper.
‘What makes a tax haven?’ webinar
Yesterday, we ran a Fair Tax Week webinar on tax havens, chaired by Guardian journalist Juliette Garside. The webinar featured award-winning author Oliver Bullough, as well as speakers from Tax Justice Network and Oxfam EU.
Watch it below.
Note: The consideration of our Tax Haven listing draws heavily on the work of others, especially that of the Tax Justice Network, and their Corporate Tax Haven Index and Financial Secrecy Index. We are very grateful for their work and fulsome co-operation.