Technical Methodology Document: How Oxfam identified the world's

OXFAM TECHNICAL BRIEFING DECEMBER 2016

TECHNICAL METHODOLOG

Y DOCUMENT

How Oxfam identified the world’s worst corporate tax havens

Collecting tax is one of the key means by which governments are able to address

poverty. But big business is dodging tax on an industrial scale, depriving governments

across the globe of the money they need to address poverty and invest in healthcare,

education and jobs. This document accompanies the policy paper Tax Battles: The

dangerous global race the bottom on corporate tax. It sets out the methodology behind

the paper and explains how Oxfam researchers formulated their ranking of the world’s

worst 15 corporate tax havens.

www.oxfam.org

1 PURPOSE

The objective of this listing process was to distinguish corporate tax havens from other types of

tax havens and to identify the most problematic global corporate tax havens (see

comprehensive definition below). Most existing listing processes have focused on secrecy

jurisdictions, which often facilitate private rather than corporate tax dodging. These lists have

often been used by corporate tax jurisdictions to claim that ‘they are not a tax haven’.

Oxfam wants to add to public understanding of the growing problem of corporate tax dodging

that is facilitated by countries which are either providing tax incentives or facilitating harmful tax

practices, including very low tax rates and/or not cooperating with international efforts against

tax avoidance.

Corporate tax havens are particularly problematic for developing countries which rely more on

corporate income tax (CIT) for financing their much-needed public services. Revenues from

corporate tax generate around 20percent of total tax receipts in low-income and lower middle-

income countries compared with just 10percent in higher income countries.

Taxing large and

stable corporations is far easier for tax administrations in developing countries than collecting

revenues from poorer individuals, the informal economy or fragmented smaller businesses.

Corporate tax avoidance by multinationals in developing countries also means wealth generated

by the poorest is often transferred to shareholders in rich countries.

Box 1: What is a tax haven?

Tax havens are jurisdictions or territories which have intentionally adopted fiscal and legal

frameworks allowing non-residents (physical persons or legal entities) to minimize the

amount of taxes they pay where they undertake substantial economic activity.

Tax havens tend to specialize and most of them do not tick all the boxes, but they usually

fulfil several of the following criteria:

• They grant fiscal advantages to non-resident individuals or legal entities only, without

requiring that substantial economic activity be undertaken in the country or

dependency.

• They provide a significantly lower effective level of taxation, including zero taxation for

natural or legal persons.

• They have adopted laws or administrative practices that prevent the automatic

exchange of information for tax purposes with other governments.

• They have adopted legislative, legal or administrative provisions that allow the non-

disclosure of the corporate structure of legal entities (including trusts, charities,

foundations, etc.), or the ownership of assets or rights.

There are several types of tax havens. A pure secrecy jurisdiction, often used by wealthy

individuals, may require a different approach than the corporate tax havens commonly used by

big multinational companies. Oxfam decided to identify corporate tax havens in order to engage

in a debate at global and domestic level as well as to ensure that adequate counter-measures

are taken against the type of tax haven that particularly promotes or enables corporate tax

avoidance.

Table 1: Tax havens – a diversified industry

Secrecy jurisdiction Corporate tax haven

Facilitating corruption, money laundering,

and avoidance and evasion of taxes on the

private wealth of individuals from other

countries.

Facilitating avoidance and evasion of taxes

on profits of multinationals generated by

operations in other countries.

No effective exchange of financial account

data or ownership data.

No corporate income tax or low overall

corporate tax rate.

No information available about ultimate

beneficial owners.

Special corporate tax regimes resulting in

non-taxation of certain profits or low effective

tax rates.

Legislation allowing secretive trusts and

other opaque financial structures.

No effective exchange or tax rulings, country-

by-country data, or other corporate tax data.

Features of corporate tax havens. Features of secrecy jurisdictions.

2 FIRST SCREENING PHASE

The process to identify the most damaging jurisdictions when it comes to corporate tax

avoidance involved two stages. First, there was a pre-analysis of jurisdictions to decide which

jurisdictions have features of a top corporate tax haven (first screening phase). Second, there

was an in-depth screening of the jurisdictions identified in the first stage.

2.1 Which countries were assessed by Oxfam and why?

Researchers produced a compilation of countries on existing lists

of problematic tax

jurisdiction, including secrecy jurisdictions and corporate tax havens. These compiled lists

included 59 jurisdictions.

Desk-based research on countries that were not on this list of 59, but,

for example, had zero percent CIT, did not suggest that these other jurisdictions were likely to

be used for corporate tax avoidance on the same scale as some of the jurisdictions already

listed, and where therefore dismissed for the ‘quick scan’ (more information in annex 2).

2.2 First screening indicators

The following indicators were used to make a first selection (from the 59) of the most

problematic corporate tax jurisdictions:

• Jurisdictions having a CIT rate equal or less than 50 percent of the global average rate of

last 10 years (i.e. 12.5 percent). This does not mean 12.5 percent is an acceptable norm,

but rather aims to highlight countries significantly outside global norms. (1 point)

• Jurisdictions where most US multinationals excess profits were located (see the study Still

Broken: Governments must do more to fix the international corporate tax system

) and/or

jurisdictions with gross intra-group debt assets above $10bn and more than 20 percent of

GDP.

Regarding the estimates of excess profits, these indicate that US multinationals report

a much larger proportion of their global profits in these countries than one would expect on

the basis of their worldwide share of sales, employees, wages and tangible assets. These

estimates are not available for a range of smaller economies, because the underlying data

were not disaggregated for these countries. Therefore a second quantitative analysis uses

intra-group loan data for all countries. Multinationals can use intra-group loans to shift profits

between subsidiaries in different countries via interest payments. At this stage the aim was

to identify countries that are large sources of intra-group loans to other countries. Intra-group

loans of more than $10bn indicate a country matters on a global scale. If such loans are

equivalent to more than 20 percent of GDP, they are disproportionate for a normal economy.

This combination warrants a more detailed analysis. (2 points)

• Jurisdictions where most multinationals hold subsidiaries, based on the following studies:

1. The Use of Tax Havens in the Ownership of Kenyan Petroleum Rights, Oxfam in

Kenya. The report reveals the widespread use of tax havens and low tax jurisdictions

in the corporate structures of companies holding petroleum rights in Kenya.

https://www.oxfam.org/en/research/use-tax-havens-ownership-kenyan-petroleum-

rights

2. La Ilusión Fiscal: Demasiadas sombras en fiscalidad de grandes empresas. Study on

subsidiaries of 35 largest Spanish listed companies in tax havens, Oxfam Intermón

https://oxfamintermon.s3.amazonaws.com/sites/default/files/documentos/files/Informe

LailusionFiscal2015.pdf and

https://oxfamintermon.s3.amazonaws.com/sites/default/files/documentos/files/Benefici

os-para-quien.pdf

3. FTSE tracker, Action Aid 2013. https://docs.google.com/spreadsheets/d/1h-q1fz1-

ORyd44wLdoKe_CHyIKGUrpnZyMqQWhkHHD4/edit?pref=2&pli=1#gid=0

4. Offshore Shell Games 2016. Citizens for Tax Justice. Study on the use of offshore tax

havens by Fortune 500US companies.

http://ctj.org/ctjreports/2016/10/offshore_shell_games_2016.php#.WEbafdSLS9I

A high number of subsidiaries in jurisdictions can be a sign that the jurisdiction plays a role in

tax structures aimed at acquisitions and avoidance of tax on capital gains. (1 or 2 points)

Through this first screening phase we identified the following countries:

1. Bahamas

2. Hong Kong

3. Barbados

4. Ireland

5. Belgium

6. Isle of Man

7. Bermuda

8. Jersey

9. British Virgin Islands

10. Luxembourg

11. Cayman Islands

12. Mauritius

13. Curaçao

14. Netherlands

15. Cyprus

16. Panama

17. Delaware*

18. Singapore

19. Guernsey

20. Switzerland

*We decided to not take Delaware through to the more detailed scoring and ranking of top

corporate tax havens, because it is a separate jurisdiction with special regulation on corporate

law, secrecy, and exemptions for local corporate income tax, but US federal corporate income

tax still applies for profits that would be shifted into Delaware.

This first screening stage does not rule out the role of other jurisdictions acting as corporate tax

havens or playing an important role in stimulating a regional or global corporate tax race to the

bottom.

Rather, the purpose of this methodology is to identify the world’s current worst corporate tax

havens and to rank them. Desk research revealed that some other tax havens which did not

make it to the second stage of our research do have an obvious reputation as a private wealth

tax haven and/or regulatory haven for corporations, and/or as corporate tax havens for financial

services, for example (Antigua and Barbuda, Labuan).

3 CRITERIA TO IDENTIFY AND RANK THE 15 MOST

AGGRESSIVE CORPORATE TAX HAVENS

The following criteria were used to rank the most problematic tax havens in the second stage of

our research (see summary overview in Annex 2):

1. Relatively large role as a corporate tax haven (up to three points)

Score for size of tax haven (max 2 or 3)

For each jurisdiction Oxfam looked at evidence of large-scale profit shifting. Oxfam used two

studies

to find this evidence, and evidence in just one study would be enough to give this

score.

The first study looks at intra group loans. We differentiated countries as follows:

• Balance of 2014 intra-group loan of > $10bn and >20 percent of GDP = 2 points.

• Balance of 2014 intra-group loan > $50bn and 20 percent of GDP = 3 points.

The second study looks at profits shifting by US multinationals. We differentiate as follows:

• Inward profit shifting >$5bn = 2 points

• Inward profit shifting >$25bn = 3 points.

Countries which meet this criteria based on the first study are on balance large (or very large)

sources of intra-group loans to other countries, in absolute terms and relative to their GDP. This

means that they are large net recipients of intra-group interest payments from other countries.

Such payments are an important channel for profit shifting. When self-reported data about

inward and outward intra-group loans provided a different picture than mirror data reported by

partner countries, a detailed data analysis was carried out to select the most reliable data

source.

Note that some countries with intra-group loan assets well in excess of $10bn and 20 percent of

GDP also have large intra-group debt liabilities, and are therefore on balance relatively small

sources of intra-group debt to other countries, or even net intra-group debtors. Two examples of

this are Singapore, which is apparently a large corporate treasury hub with large loans from and

to non-haven jurisdictions, and the British Virgin Islands, which seems used for secured debt

structures to finance investments in China. Another example is Belgium, which has provided

large intra-group loans to major economies such as the US, Germany and France. This

suggests that Belgium is a key destination for interest payments out of these countries because

of its notional interest deduction system. Yet Belgium has in turn received large intra-group

loans from Luxembourg and may thus itself be suffering from profit shifting as well, with interest

payments to Luxembourg reducing taxable profits from real business operations in Belgium.

However, this could only be confirmed using firm-level micro-data (which we do not have access

to); therefore, a conservative approach was taken and the balance of intra-group loans was

considered only in this second stage.

2. CIT rate as a proportion of the global average rate (up to four points)

The current (not weighted by GDP) global average CIT rate is 23.63 percent.

Considering the past 10 years, the average CIT rate is 24.9percent. Oxfam believes it is

relevant to compare problematic jurisdictions to a global average rate, while taking into

consideration the rapid decline of the nominal corporate tax rate. Therefore, the reference tax

rate is set at 25 percent, in order to highlight countries significantly outside global norms.

Through this they can be seen to negatively influence the race to the bottom effect. Note that

this is just an indicator for the purposes of this report and is not intended as to establish what a

fair corporate income tax rate should be.

Actually, nominal CIT has seen a dramatic decrease of 21 percent in less than 15 years, as In

2003, it was about 30 percent

, a clear signal to confirm the corporate tax competition is

causing a tax race to the bottom.

Table 2: Global average corporate income tax rate for the last 10 years

Corporate tax rate per region

Location

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Average

of last

10 years

Global

average

27.5 26.95 26.1 25.38 24.69 24.5 24.4 23.71 23.64 23.87 23.63

24.9

Therefore, criteria used to link with the Corporate Income Tax [CIT] rate are the following:

• CIT rate equal or below 25 percent

• CIT rate equal or below 12,5 (50 percent of global average of last 10 years)

• CIT rate below 6,25 percent (25 percent of global average of last 10 years)

• CIT rate of 0 percent (or no CIT)

3. No withholding tax (law, not tax treaties) [up to one point]

Zero percent withholding tax on dividends to parent companies, interest on intra-group loans,

royalties, technical and management service fees (two out of four: one point),

If a country does not levy withholding taxes, multinationals can easily move income out of a

jurisdiction in various ways. This means that multinationals can use the jurisdiction as a conduit

or to transform one type of income into another, and that low-taxed profits can be freely

distributed to foreign parents.

4. Aggressive tax planning indicators- score for tax incentives (up to three points)

Some countries are notorious low-tax tax havens, while other tax havens enable corporations to

reduce their effective tax rate through other fiscal policies. Inspired by the European

Commission (EC)-commissioned study on aggressive tax planning indicators

and by the

information provided by tax advisors, the following provisions were screened:

• Existence of patent boxes.

• Excess profit ruling possible.

• Notional interests deduction possible.

• Other incentives.

• Zero percent CIT on business outside of the jurisdiction.

5. Lack of Controlled Foreign Company rules – CFC (up to one point)

CFC rules are a very important backstop measure against many corporate tax avoidance

structures. CFC rules allow the home country of a multinational to tax profits of subsidiaries

located in other countries that apply a significantly lower tax rate. If a home country has strong

CFC rules, that makes it less attractive for a company to shift profits to tax havens, as they

might be subject to taxation in the home country at a normal rate. Such rules might also

discourage shifting profits from subsidiaries in developing countries to tax havens for companies

headquartered in richer countries. A jurisdiction that does not have CFC rules facilitates tax

avoidance abroad by offering a convenient location for parent companies of tax-aggressive

multinationals. For jurisdictions without corporate income tax or a zero percent tax rate, the CFC

rules criterion is not applicable (instead, these jurisdictions get the highest score in the

corporate income tax category).

6. Lack of commitment to international efforts against tax avoidance (up to two points)

a. Negative score on criteria on transparency and exchange of information according to the

OECD

OECD criteria 1: Implementation of the Exchange of Information on Request (EOIR)

standard. The country receives a rating by the Global Forum on Transparency and

Exchange of Information for Tax Purposes of ‘largely compliant’ or better regarding

implementation of the EOIR standard. Effective EOIR is also relevant for the exchange of

detailed information about tax rulings and other data related to corporate taxation.

OECD criteria 3: The implementation of the Automatic Exchange of Information (AEOI)

standard. The country signs the Multilateral Convention on Mutual Administrative Assistance

in Tax Matters or has a sufficiently broad exchange network providing for exchange of

information on request and AEOI. The Multilateral Convention is also an important

framework agreement for exchange of data related to corporate taxation.

(Note: OECD criteria 2 concerns signatories to the OECD Common Reporting Standards,

which is about the commitment to adopt automatic exchange of financial accounts

information. This is relevant to tackling private wealth tax dodging, but not to addressing

corporate tax avoidance.)

b. Not committed to public registries of ultimate beneficial owners.

Governments must commit to establish a public centralized register of beneficial ownership

that makes it clear who really owns all companies, foundations and trusts. Transparency of

beneficial ownership is crucial to tackle tax haven abuse. It is essential that citizens and

governments (both rich and poor) know what assets are owned offshore if they are to make

sure that everyone is paying the right amount of tax. This will ensure that money cannot be

moved around anonymously to avoid paying tax. The current behind-the-door practices not

only facilitate corruption, but allow billions in tax revenues to slip away from the world’s

poorest countries. Public registers are vital to ensure that developing countries get access to

the information, and to enable civil society to hold governments to account.

We gave one point for a combined lack of commitment to the above three elements.

c. Lack of commitment to preventing tax treaty abuse; to addressing harmful tax practices

including patent boxes; to mandatory spontaneous exchange of information on tax rulings; to

requiring filing of standardized country-by-country reports by headquarters of large

multinationals; or to exchanging such reports (considering the importance of country-by-

country-reporting (CBCR) to discourage profit shifting, it is important that countries at the

very least take the minimum steps agreed internationally so far.). Commitment is assessed

through considering, for example, membership of the OECD Inclusive framework.

We gave one point when the country lacks commitments on the above element(s).

We give a more significant weight to adherence to the BEPS Inclusive Framework because,

when in force, this will mean the adoption of treaty abuse measures and CBCR – both key

measures to enable countries to prevent or address profit shifting.

With this scoring we have taken into consideration the willingness of countries to take part in on-

going multilateral processes as a sign of progress, but also the fact that many policies

committed to are yet to be implemented/enforced. The score of max 2 is below the value given

to the size of the tax haven (3) and half the maximum score for the current, actual policies of the

countries (CIT/Incentives, max 4).

The scoring on the six indicators taken together resulted in the following top 15

corporate tax havens.

Table 3: Top 15

Characteristics

Bermuda

0 percent CIT, 0 percent withholding taxes, lack of

participation in multilateral anti-abuse, exchange and

transparency initiatives, evidence of large scale profit

shifting.

Cayman

Islands

0 percent CIT, 0 percent withholding taxes,

lack of

participation in multilateral anti-abuse, exchange and

transparency initiatives, evidence of large scale profit

shifting.

Netherlands

Tax incentives, 0 percent withholding taxes, evidence of

large scale profit shifting.

Switzerland

Tax incentives, 0 percent withholding taxes, lack of

participation in multilateral anti-abuse and transparency

initiatives, evidence of large scale profit shifting.

Singapore

Tax incentives, lack of withholding taxes, evidence of

substantial profit shifting.

Ireland

Low CIT, tax incentives, evidence of large scale profit

shifting.

Luxembourg

Tax incentives, 0 percent withholding taxes, evidence of

large scale profit shifting.

Curacao

Tax incentives, 0 percent withholding taxes, lack of

participation in multilateral anti-abuse, exchange and

transparency initiatives, evidence of substantial profit

shifting.

Hong Kong

Tax incentives, 0 percent withholding taxes, evidence of

large scale profit shifting.

10 Cyprus

Low CIT, tax incentives, 0 percent withholding taxes.

Bahamas

0 percent CIT, 0 percent withholding taxes, lack of

participation in multilateral anti-abuse and transparency

initiatives.

Jersey

0 percent CIT, 0 percent withholding taxes, evidence of

substantial profit shifting.

Barbados

Low CIT, 0 percent withholding taxes lack of participation in

multilateral anti-abuse and transparency initiatives.

Mauritius

Low CIT, 0 percent withholding taxes, lack of participation in

multilateral anti-abuse and transparency initiatives.

British Virgin

Islands

0 percent CIT, 0 percent withholding taxes, lack of

participation in multilateral anti-abuse and transparency

initiatives.

In most of these countries there is a great deal of concrete evidence, e.g. corporate tax

avoidance cases which support the high ranking of these jurisdictions are corporate tax havens.

The ranking also shows that it is not just highly secretive or no/low-tax jurisdictions which are

the most important culprits. It is also jurisdictions with relatively respectable CIT rates that

enable corporations to avoid billions of dollars in tax each year. The data and information used

also shows how this is done: either by offering extremely low rates in combination with high

levels of secrecy, and/or through offering specific tax incentives in combination with a lack of

anti-avoidance rules such as CFC rules.

In comparison, countries such as Germany, France and Denmark, which do not have a

reputation as corporate tax havens, do have withholding taxes on dividends and royalties; they

do have CFC rules; they are committed to CBCR (however, not public yet except for the

banking industry); and France and Denmark are committed to a public registry of beneficial

owners. This does not mean these jurisdictions should not do more to stop the corporate tax

race to the bottom, but there is a clear difference between them and the top corporate tax

havens.

We welcome all comments and suggestions on how to further improve this methodology for

future rankings.

ANNEX 1 SUMMARY SCORING INDICATORS TOP 19

General

Our model makes clear that it is both countries/jurisdictions with (extremely) low headline

corporate tax rates that are among the worst corporate tax havens, as well as

countries/jurisdictions with higher headline corporate tax rates but with tax incentives/regimes

enabling corporations to lower their effective rates (See ‘Score for size of tax haven’). This

explains why we give equal weight (max 4) to the ‘score for CIT category and the ‘Score for tax

incentives’ + ’lack of anti-abuse (CFC rules)’ category (max 4 combined).

Score for CIT (max 4)

(Extremely) low CIT is generally considered a main feature of tax havens. This explains the

heavy weight given to this tax policy element in our methodology.

Score for tax incentives (max 3) + Score for lack of anti-abuse (max 1) = (max 4 combined)

As our tool points out, the corporate tax havens most used by corporations for profit shifting are

not just the low-CIT tax havens. It is also jurisdictions with higher corporate tax rates, but with

tax incentives/regimes enabling corporations to lower their effective tax rates (and/or to shift

profits to the low-CIT tax havens). The role of these countries/jurisdictions in the global

corporate tax race to the bottom (considering profit shifting data) is as substantial as the role of

the low-CIT havens. This explains why we levelled the maximum score for these types of

jurisdictions with the maximum score of low-tax jurisdictions. (Note that anti-abuse/CFC-rules

are no longer applicable when a jurisdiction has a CIT of zero, which is why some low-CIT

countries (with a score of no higher than 3 on low CIT) do get an additional point for lack of CFC

rules, while jurisdictions with zero percent CIT do not.

Score for size of tax haven (max 3)

For each jurisdiction we looked at evidence of large-scale profit shifting. We used two studies to

find this evidence, and evidence on just one study would be enough to give the score. The first

study looks at ‘Balance of 2014 intra-group loan of > $10bn and >20 percent of GDP’= 2 points.

‘Balance of 2014 intra-group loan > $50bn and 20 percent of GDP’= 3 points. OR ‘Inward profit

shifting >$5bn ’= 2 points and ‘Inward profit shifting >$25bn= 3 points. With a score of 2 and

maximum 3, we ensured that the scale of profit shifting matters in the ranking (as our aim is to

identify the worst current global corporate tax havens), but it is just below the policy factors of

CIT and tax incentives in order to recognize the fact that it is the policies leading to this scale of

profit shifting (and to not create too big a gap between countries which are the current worst tax

havens, and countries with similar policies which could be on their way to becoming one of the

worst/most used corporate tax havens).

Score for lack of participation in multilateral initiatives (max 2)

We have taken into consideration the willingness of countries to take part in ongoing multilateral

processes as a sign of progress, but also the fact that many policies committed to are yet to be

implemented/enforced. The scoring of max 2 is below the value given to the size of the tax

haven (3) and half the max score for the current, actual policies of the countries (CIT/Incentives,

max 4).

• We give one point when the country lacks commitments to three elements: when one of

those jurisdictions has so far not joined the OECD/BEPS Inclusive Framework. This

indicates a lack of commitment to implement BEPS minimum standards (tax treaty abuse,

harmful tax practices and exchange of information on tax rulings and standardized CBCR).

• We give one point for the combination of a lack of commitment to OECD criteria 1 and 3,

plus non-commitment to sharing beneficial ownership information (NO when committed to

public registry, YES/NO when willing to exchange with some governments, YES when no

commitment).

• We give a more significant weight to adherence to the BEPS Inclusive Framework because,

when in force, this will mean the adoption of treaty abuse measures and CBCR – both key

measures to enable countries to prevent or address profit shifting.

Score for lack of withholding taxes (max 1)

This element of no withholding taxes which stimulates profit shifting is policy in many low-tax tax

havens as well as in tax havens with incentives. We gave it a score of 1, which could also be

considered as an add-on to the score for low CIT and/or score for tax incentives and lack of

anti-abuse.

ANNEX 2

1. Andorra (EP, EC, GAO, FTSE, IMF)

2. Anguilla (FSI, OECD, UNCTAD, EP, EC, GAO, FTSE, BIS)

3. Antigua and Barbuda ((FSI, OECD, UNCTAD, EP, EC, GAO, FTSE, BIS)

4. Aruba (FSI, OECD, UNCTAD, EP, GAO, FTSE, IMF, BIS)

5. Austria (FSI, UNCTAD)

6. Bahamas ( FSI, OECD, UNCTAD, EP, EC, GAO, FTSE, IF, BIS)

7. Bahrain (FSI, OECD, UNCTAD, EP, GAO, FTSE, BIS)

8. Barbados (FSI, OECD, UNCTAD, EP, EC, GAO, FTSE, BIS)

9. Belgium (EU investigation)

10. Belize (FSI, OECD, UNCTAD, EP, EC, GAO, FTSE, IMF)

11. Bermuda (FSI, OECD, UNCTAD, EP, EC, GAO, FTSE, IMF)

12. British Virgin Islands (FSI, OECD, UNCTAD, EP, EC, GAO, FTSE, IMF))

13. Cayman Islands (FSI, OECD, UNCTAD, EP, EC, GAO, FTSE, IMF, BIS)

14. Costa Rica (FSI, GAO, FTSE)

15. Curacao (FSI, BIS)

16. Cyprus (FSI, OECD, UNCTAD, EC, FTSE, IMF)

17. Dominica (OECD, UNCTAD, EP, GAO)

18. Delaware (FSI, EP, FTSE)

19. Fiji (EP)

20. Gibraltar (FSI, OECD, UNCTAD, FTSE, IMF, BIS)

21. Grenada (OECD, UNCTAD, EC, GAO)

22. Guam (EP, BIS)

23. Guernsey (FSI, OECD, UNCTAD, EP, EC, FTSE, IMF)

24. Hong Kong (FSI, EP, EC, GAO, FTSE, BIS)

25. Ireland (FTSE and EU investigations)

26. Isle of Man (FSI, OECD, UNCTAD, EP, FTSE, IMF, BIS)

27. Jersey (FSI, OECD, UNCTAS, EP, FTSE, IMF, BIS)

28. Jordan (GAO, FTSE)

29. Labuan, Malaysia (FSI, EP, IMF)

30. Lebanon (FSI, EP, GAO, FTSE, BIS)

31. Liberia (FSI, OECD, UNCTAD, EC, GAO, FTSE)

32. Liechtenstein (FSI, OECD, UNCTAD, EP, EC, FTSE, IMF)

33. Luxembourg (FSI, FTSE, EU investigations)

34. Macao (FSI, EP, GAO, FTSE, IMF, BIS)

35. Maldives (EP, EC, FTSE)

36. Malta (FSI, OECD, UNCTAD, FTSE)

37. Marshall Islands (FSI, OECD, UNCTAD, EP, EC, GAO)

38. Mauritius (FSI,OECD, UNCTAD, EP, EC, FTSE, BIS)

39. Monaco (FSI, OECD, UNCTAD, EP, EC, FTSE, IMF)

40. Montserrat (OECD, UNCTAD, EP, EC, GAO, IMF)

41. Netherlands (FSI, UNCTAD, FTSE, EU investigations)

42. Niue (OECD, UNCTAD, EP, EC)

43. Nauru (OECD, UNCTAD, EP, EC, GAO)

44. Palau (EP, IMF)

45. Panama (FSI, OECD, UNCTAD, EP, EC, GAO, FTSE, IMF, BIS)

46. Samoa (FSI, OECD, UNCTAD, EP, EC, GAO, FTSE, IMF, BIS)

47. St Kitts Y Nevis (FSI, OECD, UNCTAD, EP, EC, GAO, FTSE, IMF, BIS)

48. Saint Marten (BIS)

49. San Marino (OECD, UNCTAD, EP)

50. St Vincent and Grenadine (FSI, OECD, UNCTAD, EP, EC, GAO)

51. St Lucia (FSI, OECD, UNCTAD, EP, GAO, FSTE)

52. Seychelles (FSI, OECD, UNCTAD, EP, EC, FTSE, IMF)

53. Singapore (FSI, EP, GAO, FTSE)

54. Switzerland (FSI, EP, FTSE)

55. Tonga (EP, GAO)

56. The Cooks Islands (OECD, UNCTAD, EP, EC, GAO, FTSE, IMF)

57. Turks and Caicos (FSI, OECD, UNCTAD, EP, EC, IMF)

58. US Virgin Islands (FSI, OECD, UNCTAD, EP, EC, GAO, FTSE)

59. Vanuatu (FSI, OECD, UNCTAD, EC, GAO, IMF, BIS)

ANNEX 3: USEFUL INFORMATION FOR DESK

RESEARCH

Top 5 EU countries facilitating corporate tax

planning

Jurisdiction Rank

Netherlands 1

Belgium 2

Cyprus 3

Malta 4

Latvia 5

Luxembourg 5

Hungary 5

Based on a study commissioned by the European Commission on Structures of Aggressive Tax

Planning and Indicators, Taxation papers – working paper 61-2015.

https://ec.europa.eu/taxation_customs/sites/taxation/files/docs/body/taxation_paper_61.pdf

Top 2015 Financial secrecy jurisdictions only considering highest

Financial Secrecy score

Jurisdiction Rank

Vanuatu 1

Samoa 2

St. Lucia 3

Liberia 4

Brunei Darussalam 5

Antigua and Barbuda 6

Marshall Islands 7

Bahamas 8

Nauru 9

Belize 10

Lebanon 11

Barbados 12

St. Kitts and Nevis 13

St. Vincent and Grenadines 14

United Arab Emirates 15

Based on Financial Secrecy Index ranks jurisdictions according to their secrecy and the scale of

their offshore financial activities, 2015 http://www.financialsecrecyindex.com/introduction/fsi-

2015-results

Overview of all countries with CIT equal or below 12.5% (50% of global

average Corporate Income Tax Rate for last 10 years)

Country

CIT rate (%)

Anguilla 0.0

Bahamas 0.0

Bahrain 0.0

Bermuda 0.0

Cayman Islands 0.0

Guernsey 0.0

Isle of Man 0.0

Jersey 0.0

Nauru 0.0

Palau 0.0

Turks and Caicos Islands 0.0

Vanuatu 0.0

British Virgin Islands 0.0

Wallis and Futuna 0.0

Uzbekistan 7.5

Turkmenistan 8.0

Montenegro 9.0

Timor-Leste 10.0

Qatar 10.0

Paraguay 10.0

Former Yugoslav Republic of

Macedonia

10.0

Kyrgyzstan 10.0

Gibraltar 10.0

Bulgaria 10.0

Bosnia and Herzegovina 10.0

Andorra 10.0

Oman 10.0

Republic of Moldova 12.0

Macao 12.0

Liechtenstein 12.5

Ireland 12.5

Cyprus 12.5

Based on Tax Foundation publication Corporate Income Tax Rates [CIT] around the World,

2016

http://taxfoundation.org/article/corporate-income-tax-rates-around-world-2016

Corporate income tax rate per region

Location

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Average

of last

years

Africa

average

30.82 30.56 28.65 28.75 28.38 28.55 29.02 28.29 27.85 27.92 27.46 28.8

Americas

average

29.97 29.27 28.84 28.82 28.28 29.28 28.67 28.35 27.96 27.35 27.86 28.6

Asia

average

28.99 28.46 27.99 25.73 23.96 23.1 22.89 22.05 21.91 22.59 21.97 24.5

Europe

average

23.7 22.99 21.95 21.64 21.46 20.81 20.42 20.6 19.68 20.12 20.48 21.3

Oceania

average

30.6 30.2 29.6 29.2 29 28.6 28.6 27 27 27 26 28.4

North

America

average

38.05 38.05 36.75 36.5 35.5 34 33 33 33.25 33.25 33.25 35.0

Latin

America

average

29.07 28.3 27.96 27.96 27.52 28.83 28.3 27.96 27.52 26.85 27.29 28.0

average

24.83 23.97 23.17 23.11 22.93 22.7 22.51 22.75 21.34 22.25 22.09 22.9

OECD

average

27.67 27 25.99 25.64 25.7 25.4 25.15 25.32 24.11 24.86 24.85 25.6

Global

average

27.5 26.95 26.1 25.38 24.69 24.5 24.4 23.71 23.64 23.87 23.63 24.9

Based on Corporate tax rates table, KPMG 2006–2016

https://home.kpmg.com/xx/en/home/services/tax/tax-tools-and-resources/tax-rates-

online/corporate-tax-rates-table.html

NOTES

1 http://unctad.org/en/PublicationsLibrary/wir2015_en.pdf

2 Oxfam reviewed, among other lists, GAO: http://www.gao.gov/assets/290/284522.pdf; FAS

https://www.fas.org/sgp/crs/misc/R40623.pdf; BIS; http://www.bis.org/statistics/dsd_cbs.pdf; IMF:

https://www.imf.org/external/NP/ofca/OFCA.aspx; and we complemented this by reviewing other sources,

including the EU investigations: http://ec.europa.eu/competition/state_aid/tax_rulings/index_en.html and

the EC-commissioned study on aggressive tax planning:

http://ec.europa.eu/taxation_customs/sites/taxation/files/resources/documents/taxation/gen_info/economic

_analysis/tax_papers/taxation_paper_61.pdf

3 Andorra, Anguilla, Antigua and Barbuda, Aruba, Bahamas, Bahrain, Barbados, Belgium, Belize,

Bermuda, Bonaire, Saint Eustatius and Saba, British Virgin Islands, Cayman Islands, Costa Rica, Cyprus,

Curacao, Dominican republic, Delaware (US), Fiji, Gibraltar, Grenada, Guam, Guernsey, Hong Kong,

Ireland, Isle of Man, Northern Mariana Islands, Salomon Islands, Jersey, Jordan, Labuan, Malaysia,

Lebanon, Liberia, Liechtenstein, Luxembourg, Macao, Maldives, Malta, Marshall Islands, Mauritius,

Monaco, Montserrat, Nauru, Netherlands, Palau, Panama, Samoa, Saint Kitts and Nevis, Saint Martin,

Saint Vincent and Grenadines, Saint Lucia, Seychelles, Singapore, Switzerland, Tonga, The Cooks

Islands, Turks and Caicos, US Virgin Islands, Vanuatu.

4 Still Broken: Governments must do more to fix the international corporate tax system, F. Weyzig for Tax

Justice Network, Global alliance for Tax justice, PSI, Oxfam, 2015. The study investigates profit shifting

from US Multinationals and looked at where excess profits were located (defined as profits over and above

what could be expected on the basis of economic activity indicators).

5 Statistic department, Coordinated Direct Investment Survey (CDIS), International Monetary Fund, 2014

data retrieved in September and October 2016 http://cdis.imf.org.

6 Measuring Misalignment: the Location of US Multinationals’ Economic Activity Versus the Location of

their Profits, Alex Cobham and Petr Janský, 2015, http://www.taxjustice.net/topics/more/size-of-the-

problem/tax-corporate-profit-shifting-big/ And Statistic department, Coordinated Direct Investment Survey

(CDIS), International Monetary Fund, 2014 data retrieved in September and October 2016

http://cdis.imf.org.

7 Corporate tax rates table, KPMG 2006 - 2016 https://home.kpmg.com/xx/en/home/services/tax/tax-tools-

and-resources/tax-rates-online/corporate-tax-rates-table.html

8 http://taxfoundation.org/article/corporate-income-tax-rates-around-world-2016

9 Op. Cit Corporate tax rates table, KPMG 2006 –2016

10 European Commission. (2015). Study on Structures of Aggressive Tax Planning and Indicators.

Taxation papers – working paper 61-2015

http://ec.europa.eu/taxation_customs/sites/taxation/files/resources/documents/taxation/gen_info/economic

_analysis/tax_papers/taxation_paper_61.pdf

11 http://www.oecd.org/tax/oecd-secretary-general-tax-report-g20-finance-ministers-july-

2016.pdf?utm_source=Adestra&utm_medium=email&utm_content=OECD%20Secretary-

General%20Report%20to%20G20%20Finance%20Ministers&utm_campaign=Tax%20News%20Alert%20

25-07-2016&utm_term=demo

12 Withholding taxes are those deducted at source, especially on interest, dividends, or royalties paid to a

company or person resident outside that country.

13 During the ICRICT workshop that took place in Bogota on May 19–20, Tax Justice Network presented

ideas and a draft on a corporate tax haven index to be developed by 2018.

This paper was written by Esmé Berkhout and Aurore Chardonnet. Oxfam acknowledges the assistance of

Francis Weyzig, Susana Ruiz, Luke Gibson, Oliver Pearce, Michael McCarthy Flynn, Kalina Tsang, Miguel

Alba Ruiz-Morales, Maria Villanueva Serrano and Leïla Bodeux in its production. It is part of a series of

papers written to inform public debate on development and humanitarian policy issues.

For further information on the issues raised in this paper please e-mail advocacy@oxfaminternational.org

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The information in this publication is correct at the time of going to press.

Published by Oxfam GB for Oxfam International under ISBN 978-0-85598-855-5 in December 2016.

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