The Top Corporate Tax Havens and Global Tax Reform

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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%


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