PARIS: The UAE has entered the top 10 tax havens in the world for the first time, research showed Tuesday in a report that highlighted OECD countries and their dependencies for more than two-thirds of “global corporate tax abuse”.
According to research by the Tax Justice Network, the rise in the rankings came after multinationals in South Africa and the United States poured $ 218 billion in funds from the Netherlands into the Gulf Monarchy – more than half of their GDP.
The news highlighted “the UAE’s growing role as the preferred offshore financial center for multinational corporations,” wrote Mark Bou Mansour of the Tax Justice Network on the NGO’s website.
The data doesn’t show which companies sent the funds, he added.
The Tax Justice Network’s annual ranking names and shames countries most complicit in “helping multinational corporations pay less taxes than expected”.
While the report newly added the United Arab Emirates to the top ten worst offenders, it also said that the OECD countries and their dependencies are responsible for more than two-thirds of the “global risks of corporate tax abuse.”
Of this, 45% comes from the “UK Spider Web” – areas under the legal jurisdiction of the UK Government.
There are three British overseas territories in the first three locations this year: the Virgin Islands, the Cayman Islands and Bermuda.
Crown addiction Jersey was listed No. 8.
The Cayman Islands also ranked first on the Group’s Financial Secrecy Index, after “the volume of financial activities conducted by non-residents” rose 21%.
The top 10 offenders include the Asian financial centers of Singapore and Hong Kong, as well as the members of the European Union, the Netherlands and Luxembourg.
International corporate tax avoidance results in hundreds of billions of dollars being lost from the world economy, according to the World Economic Forum.
To curb tax avoidance, the OECD has proposed a multilateral agreement known as BEPS 2.0, which will provide 137 jurisdictions with a minimum tax rate.