The British Virgin Islands, Cayman Islands and Bermuda have been ranked as the world's top three tax havens, according to a biennial study by the Tax Justice Network. The British Virgin Islands was described as the 'greatest enabler of corporate tax abuse', with the Cayman Islands in second place and Bermuda third.
The United Kingdom itself appeared at number 13 in the index, which assesses how each jurisdiction's tax and financial systems allow multinational corporations to reduce their taxable profits. The report highlighted that the UK, along with its overseas territories and crown dependencies, provides the widest scope for international companies to cut their tax bills.
The United Arab Emirates entered the top ten for the first time, following an investigation that found it had benefited from $250bn (£180bn) of multinational funds routed through the Netherlands. The report said the UAE had become a new destination for corporations operating in Africa and the Middle East, with South Africa identified as one of the biggest losers from profit shifting.
The Tax Justice Network criticised the OECD's efforts to tackle tax avoidance, stating that tax havens are thriving. Dereje Alemayehu, executive coordinator of the Global Alliance for Tax Justice, said the findings show the world's biggest economies help companies avoid $245bn in tax, and that trusting the OECD is 'like trusting a pack of wolves to build a fence around your chicken coop'.
The report noted that OECD countries are responsible for 39% of global corporate tax abuse risks, while their territories and former colonies account for 29%. It argued that the UN should take over the role of fostering global tax rules, as countries graded 'not harmful' by the OECD are responsible for 98% of abuses.
Pascal Saint-Amans, director of the OECD's tax policy centre, defended progress made in recent years, including the sharing of bank details for 84 million accounts and a deal to set a minimum tax rate for digital services. However, the Tax Justice Network maintained that the UK's overseas territories and crown dependencies continue to facilitate capital flight from poor nations.
