As a preamble, this ranking is based on the 2021 index of tax havens for companies, published by the International Network for Tax Justice . It is therefore a question here of studying which countries favor the risk of corporate tax evasion.
And in this regard, the Top-3 of the ranking is entirely made up of islands from the British overseas territory. The network behind this ranking gives these islands a score of 100/100 on tax abuses in financial systems and jurisdictions. At the top, the British Virgin Islands, which stand out for their global weight estimated at 2.3%. Thus, the British Virgin Islands are responsible for 6.4% of the risk of corporate tax abuse worldwide. Next come the Cayman Islands (6.0%) and Bermuda (5.7%).
Note that Great Britain is particularly represented in this ranking, since in eighth position, we find Jersey which is a dependency of the British Crown. As for the UK, it is 13th with a weight globally very high 7.3%. We also observe that other British territories join the Top-30: Guernsey, Isle of Man, Gibraltar. The study reveals that the UK and its network are responsible for up to 31% of the risk of tax evasion.
Great Britain, however, is not the only OECD (Organization for Economic Co-operation and Development) country to let large companies shift their profits outside of the countries in which they do business. The most striking example is that of the Netherlands, 4th world tax haven according to the Tax Justice Network. With very low tax rates on certain activities, the Netherlands invites companies to set up their head office in the country without necessarily having any activity. The Oxfam had also highlighted the Dutch practices, ranking as 3e worst tax haven in the world.
Not surprisingly, the network ranking places Switzerland and Luxembourg respectively to the 5th and 6th world leaders. However, Switzerland is no longer so called upon to circumvent corporate tax. The Swiss tax haven has even turned into hell for the French . Still, OECD countries remain responsible for more than 68% of global tax losses, amounting to $ 166 billion per year. Faced with these revelations, the OECD hopes for a global agreement on corporate tax in 2021 . In 2020, it was also admitted that a reform of cross-border taxation by the OECD would increase revenues by 100 billion dollars per year.. To understand this, we must know that the major European countries integrate this ranking: Belgium (16th ), France (18th ), Spain (22th ), Germany (23th ), Sweden (26th ), Italy ( 27e )… It should also be remembered that it is precisely the OECD that sets the global rules in terms of corporate taxation.
In Asia, too, small countries have fairly aggressive tax avoidance policies. Hong Kong reached the 7th place in the ranking and the first non-OECD countries. Singapore, meanwhile, 9th tax haven according to the Tax Justice Network. These two states are also, according to Oxfam, two of the ten countries with the most harmful tax policies.
The United Arab Emirates also appear in this Top-10. And this entry in the Top-10 of tax havens, the United Arab Emirates owe it to the Netherlands which, according to the Tax Justice Network, is at the origin of the embezzlement of 218 billion dollars of foreign direct investment by large companies to Dubai and the United Arab Emirates. These would be funds from the United States and South Africa which usually went to China. This contribution has considerably developed the financial activity of large companies in this Middle Eastern country, which explains the increase in the classification of tax havens. The United Arab Emirates would also replace certain British Isles as a destination for multinationals established in Holland.
Apart from these few small states, Asia is not well represented. China is 19th and responsible for 2% of the risk of corporate tax abuse worldwide. It is respectively found Macao and Taiwan as 47th and 55th world leaders.