The average American with an adjusted gross income of $ 50,000 to $ 75,000 pays about $ 5,385 in taxes, but Apple does (AAPL) – Get the report paid almost nothing in taxes on $ 74 billion in worldwide sales between 2009 and 2012.
General Electric (GIVE) – Get the report According to the Americans for Tax Fairness, profits of € 27.5 billion were generated from 2008 to 2012, but tax refunds of € 3.1 billion were requested.
How do these multinationals do it? It is about the establishment of headquarters or subsidiaries in corporation tax corporations, countries with attractive tax systems and favorable confidentiality laws.
This list of corporate tax havens is based on an index from the Tax Justice Network, a UK-based independent international network that focuses on research, analysis and advocacy in the area of international tax and financial regulation.
The index ranks countries based on their “complicity in global corporate tax,” according to the Tax Justice Network. Each country’s tax system is assessed based on the degree to which it enables corporate tax avoidance. The rating of each country’s corporate tax havens is then combined with the level of business activity in the country to determine the proportion of global business activity that the country is exposed to tax avoidance.
The Tax Justice Network’s goal is tax justice and states that, according to their website, these countries have “aggressively undermined the ability of governments around the world to sensibly tax multinational corporations,” and that an estimated $ 500 billion in corporate tax evaded each year are used by multinational corporations around the world, while the International Monetary Fund estimates it at $ 600 billion.
Of the top 10 tax havens – which account for 52% of global corporate tax avoidance risk – the top 3 are UK territories (British Virgin Islands, Bermuda and Caymans) and No. 7, Jersey, a UK dependency. These four account for nearly 25% of the total tax haven share of the 64 jurisdictions. Overall, the UK is responsible for more than a third of the global corporate tax avoidance risk, according to the Tax Justice Network.
Based on the index, these are the top 30 tax havens for businesses.
- Each country’s share of the index is expressed as a percentage, with all 64 countries adding up to 100%.
- The tax haven rating for each jurisdiction is based on 20 indicators that reflect the many different rules, laws, and mechanisms that multinational corporations can use to avoid tax. A score of 100 means the jurisdiction is a corporate tax haven with no locks, while a zero means there is no tax haven potential.
- The third point, global weight, estimates how often multinationals use the jurisdiction and is based on data on foreign direct investment provided by the IMF.
1. British Virgin Islands
Share in the Corporate Tax Haven Index: 7.29%
Tax haven score: 100/100
Global scale weight: 2.12%