The Top Corporate Tax Havens and Global Tax Reform
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.
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A Global Minimum Tax
An 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.
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