{"id":320126,"date":"2019-05-30T18:02:57","date_gmt":"2019-05-30T16:02:57","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=320126"},"modified":"2019-05-30T16:19:24","modified_gmt":"2019-05-30T14:19:24","slug":"these-are-the-countries-where-people-move-their-money-to-avoid-tax","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/banking\/320126\/these-are-the-countries-where-people-move-their-money-to-avoid-tax\/","title":{"rendered":"These are the countries where people move their money to avoid tax"},"content":{"rendered":"

The Tax Justice Network<\/a><\/strong> has released a new ranking of tax havens<\/a><\/strong>, showing which countries in the world have the least restrictive and tax systems, drawing the interest of individuals and businesses looking to avoid high taxes.<\/p>\n

The index ranks countries by their complicity in global corporate ‘tax havenry’ – scoring each country\u2019s tax system based on the degree to which it enables corporate tax avoidance.<\/p>\n

Each country\u2019s corporate tax haven score is then combined with the scale of corporate activity in the country to determine the share of global corporate activity put at risk of tax avoidance by the country.<\/p>\n

The greater the share of global corporate activity jeopardised by the country\u2019s tax system, the higher it ranks on the index, the group said.<\/p>\n

The index identified the UK and a handful of OECD countries as the jurisdictions “most responsible for the breakdown of the global corporate tax system”.<\/p>\n

The UK in particular holds the biggest share of responsibility through its controlled network of satellite jurisdictions, the TJN said, where these have aggressively undermined the ability of governments across the world to meaningfully tax multinational corporations.<\/p>\n

The UK is responsible for over a third of the world\u2019s corporate tax avoidance risk, it said.<\/p>\n

South Africa ranked 42nd.<\/p>\n

“An estimated $500 billion in corporate tax is dodged each year globally by multinational corporations \u2013 enough to pay the UN\u2019s under-funded humanitarian aid budget 20 times over every year,” the group said.<\/p>\n

According to the TJN\u00a0around 40% of today\u2019s cross-border direct investments reported by the IMF \u2013 $18 trillion in value \u2013 are being booked in just 10 countries that offer corporate tax rates of 3% or less.<\/p>\n

The Corporate Tax Haven Index complements the Tax Justice Network\u2019s Financial Secrecy Index<\/a><\/strong>, which ranks countries by their contribution to global financial secrecy with a focus on individuals, as opposed to multinational corporations.<\/p>\n

These are the biggest tax havens in the world<\/strong><\/p>\n

\"\"<\/a><\/p>\n

Double blow for tax<\/strong><\/p>\n

According to the TJN, the top jurisdictions identified in the index have dealt the global corporate tax system a devastating double blow.<\/p>\n

“First, the colossal scale at which the jurisdictions have enabled corporate tax avoidance risks to woo multinational corporations has made countries\u2019 statutory corporate tax rates meaningless.<\/p>\n

“Second, the jurisdictions have triggered a \u2018race to the bottom\u2019 across the globe that will further deplete tax revenues as countries desperate to claw back foreign investment engage in the false economy of \u2018tax competitiveness\u2019 and increase their complicity in corporate tax havenry,” it said.<\/p>\n

On top of these corrosive behaviours, the group also identified what it called the “aggressive dispossession” of low income countries’ tax rights.<\/p>\n

This is through completely uneven double tax treaties – where countries negotiate standards and laws that resolve issues involving double taxation of passive and active income. Tax treaties generally determine the amount of tax that a country can apply to a taxpayer’s income.<\/p>\n

“Out of all double tax treaties negotiated by jurisdictions ranked by the Corporate Tax Haven Index with low income and lower middle income countries, 75% secured reduced withholding tax rates from low income and lower middle income countries that were below the average withholding tax rates those countries offered,” the group said.<\/p>\n

“In doing so (these countries are) stripping away poorer countries\u2019 few defences against illicit financial flows. The double whammy of corporate tax avoidance risks and reduced withholding rates makes it incredibly difficult for low income countries to stop the syphoning of tax revenues from their economies,” it said.<\/p>\n

\n

Read: How much South Africans could lose due to the new expat tax<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

The Tax Justice Network has released a new ranking of tax havens, showing which countries in the world have the least restrictive and tax systems, drawing the interest of individuals and businesses looking to avoid high taxes.<\/p>\n","protected":false},"author":10,"featured_media":320136,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[961],"tags":[26,12779],"class_list":["post-320126","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-banking","tag-headline","tag-tax-justice-network"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/320126","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=320126"}],"version-history":[{"count":2,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/320126\/revisions"}],"predecessor-version":[{"id":320140,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/320126\/revisions\/320140"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/320136"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=320126"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=320126"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=320126"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}