New Top Ten List: Countries that Promote Tax Avoidance (Surprise: the US Didn't Make the List)

offshore taxes investigationThe Tax Justice Network released its 2019 Corporate Tax Haven index (CTHI).  The list highlights countries that strongly contribute to a “race to the bottom on corporate taxes.”


The Tax Justice Network (TJN) is an agile, independent global resource dedicated to nudging the needle in a big way on tax havens and the corrosive effect of tax monies lost to personal and professional profiteering.


This is the inaugural year for the CTHI and it will be updated every two years. The organization also maintains a Financial Secrecy Index (FSI).  Together, the two reports evaluate the most important tax hideouts for multinational companies (CTHI) and those with the most opaque regulatory environments (FSI).


High wealth individuals, institutional investors, and other organizations frequently avail themselves of legal tax havens and preferential tax structures in order to grow and protect wealth.  We work regularly with clients around the country and the world to maintain, build, and safeguard investments.


There is no problem with being systematically smart in federal and global tax dealings.  The problem occurs when funds legitimately owed to governments and other agencies are siphoned into secrecy jurisdictions or pocketed in money laundering schemes. Overall, these type of strategies result in lopsided global economies, instability, regional poverty, and financial inequity.


In this report, the TJN ranks countries on “how aggressively and how extensively each jurisdiction contributes to helping the world’s multinational enterprises escape paying tax…”. That seems pretty straightforward.  Here is a look at the current top ten:

  1. British Virgin Islands
  2. Bermuda
  3. Cayman Islands
  4. Netherlands
  5. Switzerland
  6. Luxembourg
  7. Jersey
  8. Singapore
  9. Bahamas
  10. Hong Kong


These results are not all that surprising given what we know of the traditional offshore secrecy jurisdictions in the British Virgin Islands, the Cayman Islands, and Bermuda.  Ongoing tax prosecutions of tax crime have fingered Switzerland and Luxembourg as well.  What is surprising is that the United States does not enter the list until #25.  Whereas Luxembourg earned a score of 73/100, the USA comes in at 43/100.


The scoring on this report focused on how strongly the laws and infrastructure of a country are used to court big companies.  When companies shift business dealings to countries actively offering preferential tax rules, neighboring countries lose as does the tax-base of the countries where the multinational is based.


Reports and rankings like this one keep a spotlight on people and processes that prefer to function in the dark.  If you are concerned about a tax issue that might seem a little shady, get experienced legal advice.


Speak with a trusted tax attorney in Cleveland and Chicago

Serving clients nationwide from offices in Cleveland and Chicago, the law firm of Robert J. Fedor Esq., LLC delivers knowledgeable, experienced legal guidance on IRS audits, tax litigation, and defense on criminal tax matters.  Contact our legal team today online, or call us at 800-579-0997.


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