Bermuda, the Cayman Islands, the Netherlands, Switzerland and Singapore top a list of the “world’s worst corporate tax havens”, according to an Oxfam report.
The report – Tax Battles: The dangerous global race to the bottom on corporate tax – exposes the 15 nations which it describes as the “worst tax havens used globally by multinationals to avoid paying tax in the countries where they operate”.
The top five aside, the list also includes Ireland, Luxemberg, Curacao, Hong King, Cyprus, the Bahamas, Jersey, Barbados, Mauritius and the British Virgin Islands.
An analysis by Oxfam Australia estimates that use of these 15 tax havens by Australian-based multinationals cost Australia between $4 billion and $4.8 billion in 2014 and accounted for about 90 per cent of the nation’s lost corporate tax. It also found Switzerland, Singapore, and The Netherlands were the top three offshore financial centres used by “tax-dodging multinationals” operating in Australia.
The report, meanwhile, says tax havens are only one part of the problem. It also claims reductions in corporate tax rates are sparking a “global race to the bottom”, citing data showing rising net profits by the world’s largest companies over the past 30 years have not been matched by a similar rising trend in corporate income tax. The report says developing countries lose about $US100 billion annually as a result of corporate tax avoidance schemes.
Muheed Jamaldeen, Oxfam Australia’s senior economist, said Australian-based companies need to be “crystal clear” about what taxes they were paying and where, adding that there is “no winner in the race to the bottom on corporate tax”.
“Creating a public list of the world’s worst tax havens is a step towards creating disincentives for multinationals to use them,” he said. “It is also about transferring the burden of proof back onto companies to prove that operations in these jurisdictions are genuine.”
He said Oxfam was renewing calls for tax transparency legislation that requires multinationals in Australia with an income greater than $250 million to “publically report incomes, employees, profits earned and taxes paid for every country in which they operate”.
The report follows an earlier report released this year showing that just 62 people own the same amount of wealth as the poorest 3.6 billlion people.
