Until a international agreement to ensure big companies pay a minimum tax rate of 15% is implemented, these are currently the top corporate tax havens.
To attract business, countries offer tax breaks to big companies. If multinational corporations set up headquarters or subsidiaries in the countries with the most attractive tax systems and favorable secrecy laws, they can pay almost no taxes on billions of revenue.
According to the Institute on Taxation and Economic Policy, in 2020:
FedEx (FDX) – Get FedEx Corporation Report zeroed out its federal income tax on $1.2 billion of U.S. pretax income and received a rebate of $230 million, Nike (NKE) – Get NIKE, Inc. Class B Report paid no federal income tax on almost $2.9 billion of U.S. pretax income and got a $109 million tax rebate, Dish Network (DISH) – Get DISH Network Corporation Class A Report paid no federal income taxes on $2.5 billion of U.S. income and Salesforce (CRM) – Get salesforce.com, inc. Report avoided all federal income taxes on $2.6 billion of U.S. income.The Tax Justice Network, a U.K.-based independent international network focused on research, analysis and advocacy in the area of international tax and financial regulation, keeps track of the countries that play the largest role in global corporate tax avoidance. Their index ranks countries by their “complicity in global corporate tax havenry,” according to the Tax Justice Network.
Each country’s tax system is scored based on the degree to which it enables corporate tax avoidance. Each country’s 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.
A Global Minimum TaxAn international agreement to ensure big companies pay a minimum tax rate of 15% and make it harder for them to avoid taxation has been signed by 141 countries and jurisdictions, according to the Organisation for Economic Cooperation and Development.
Early holdouts including Ireland, Hungary and Cyprus, and later Kenya, Nigeria, Pakistan and Sri Lanka — have all joined the agreement.
These countries and jurisdictions have agreed to implement 15 actions to tackle tax avoidance, improve the coherence of international tax rules, ensure a more transparent tax environment and address the tax challenges arising from the digitalization of the economy, according to the OECD.
The agreement calls for countries to bring it into law in 2022 so that it can take effect by 2023.
This list is from the Tax Justice Network’s 2021 index of the top corporate tax havens.
1. British Virgin Islands
Share of the Corporate Tax Haven Index: 6.4%Tax haven score: 100Share in global foreign direct investment: 2.3%2. Cayman Islands
Share of the Corporate Tax Haven Index: 6.0%Tax haven score: 100Share in global foreign direct investment: 1.9%3. Bermuda
Share of the Corporate Tax Haven Index: 5.7%Tax haven score: 100Share in global foreign direct investment: 1.6%4. Netherlands
Share of the Corporate Tax Haven Index: 5.5%Tax haven score: 80Share in global foreign direct investment: 11%5. Switzerland
Share of the Corporate Tax Haven Index: 5.1%Tax haven score: 89Share in global foreign direct investment: 3.4%6. Luxembourg
Share of the Corporate Tax Haven Index: 4.1%Tax haven score: 74Share in global foreign direct investment: 9%7. Hong Kong
Share of the Corporate Tax Haven Index: 4.1%Tax haven score: 78Share in global foreign direct investment: 5.5%8. Jersey
Share of the Corporate Tax Haven Index: 3.9%Tax haven score: 100Share in global foreign direct investment: 0.51%9. Singapore
Share of the Corporate Tax Haven Index: 3.9%Tax haven score: 85Share in global foreign direct investment: 2.3%10. United Arab Emirates
Share of the Corporate Tax Haven Index: 3.8%Tax haven score: 98Share in global foreign direct investment: 0.54%11. Ireland
Share of the Corporate Tax Haven Index: 3.3%Tax haven score: 77Share in global foreign direct investment: 3.2%12. Bahamas
Share of the Corporate Tax Haven Index: 3.3%Tax haven score: 100Share in global foreign direct investment: 0.31%Ale Argentieri/Shutterstock
13. United Kingdom
Share of the Corporate Tax Haven Index: 3.1%Tax haven score: 69Share in global foreign direct investment: 7.3%14. Cyprus
Share of the Corporate Tax Haven Index: 3.1%Tax haven score: 85Share in global foreign direct investment: 1.1%15. Mauritius
Share of the Corporate Tax Haven Index: 2.3%Tax haven score: 81Share in global foreign direct investment: 0.66%16. Belgium
Share of the Corporate Tax Haven Index: 2.2%Tax haven score: 73Share in global foreign direct investment: 1.6%17. Guernsey
Share of the Corporate Tax Haven Index: 2.2%Tax haven score: 98Share in global foreign direct investment: 0.1%18. France
Share of the Corporate Tax Haven Index: 2.1%Tax haven score: 67Share in global foreign direct investment: 2.8%19. China
Share of the Corporate Tax Haven Index: 2.0%Tax haven score: 63Share in global foreign direct investment: 4.9%20. Isle of Man
Share of the Corporate Tax Haven Index: 1.9%Tax haven score: 100Share in global foreign direct investment: 0.061%ZGPhotography / Shutterstock
21. Malta
Share of the Corporate Tax Haven Index: 1.7%Tax haven score: 79Share in global foreign direct investment: 0.37%Iakov Filimonov / Shutterstock
22. Spain
Share of the Corporate Tax Haven Index: 1.6%Tax haven score: 65Share in global foreign direct investment: 1.6%23. Germany
Share of the Corporate Tax Haven Index: 1.4%Tax haven score: 58Share in global foreign direct investment: 3.4%24. Hungary
Share of the Corporate Tax Haven Index: 1.4%Tax haven score: 72Share in global foreign direct investment: 0.41%Shutterstock
25. U.S.
Share of the Corporate Tax Haven Index: 1.2%Tax haven score: 47Share in global foreign direct investment: 12%26. Sweden
Share of the Corporate Tax Haven Index: 1.1%Tax haven score: 61Share in global foreign direct investment: 0.9%27. Italy
Share of the Corporate Tax Haven Index: 1.0%Tax haven score: 58Share in global foreign direct investment: 1.2%Shutterstock
28. Panama
Share of the Corporate Tax Haven Index: 0.93%Tax haven score: 72Share in global foreign direct investment: 0.13%29. Curacao
Share of the Corporate Tax Haven Index: 0.8%Tax haven score: 72Share in global foreign direct investment: 0.08%30. Gibraltar
Share of the Corporate Tax Haven Index: 0.79%Tax haven score: 66Share in global foreign direct investment: 0.17%