Oxfam: Luxembourg, Ireland, Netherlands among worst tax havens

Luxembourg, Ireland, Cyprus, and the Netherlands are among the world’s 10 worst tax havens, despite an ongoing EU crackdown on tax avoidance and profit shifting across the bloc.

The findings come in a report by the charity Oxfam, which aims to expose the worst offenders in the “global race to the bottom on corporate tax.”

“Corporate tax havens are helping big business cheat countries out of billions of dollars every year,” said Esmé Berkhout, a tax policy adviser for Oxfam. “They are propping up a dangerously unequal economic system that is leaving millions of people with few opportunities for a better life.”

The full ranking of the world’s top offenders is: (1) Bermuda; (2) the Cayman Islands; (3) the Netherlands; (4) Switzerland; (5) Singapore; (6) Ireland; (7) Luxembourg; (8) Curaçao; (9) Hong Kong; (10) Cyprus; (11) Bahamas; (12) Jersey; (13) Barbados; (14) Mauritius; and (15) the British Virgin Islands.

The listing criteria was based on countries with the “most damaging tax policies,” such as zero corporate tax rates, which ultimately harm the average taxpayers, the NGO said.

“When corporate tax bills are cut, governments balance their books by reducing public spending or by raising taxes such as [value-added tax], which fall disproportionately on poor people,” Oxfam said in a statement.

Luxembourg, Ireland, and the Netherlands are already under pressure from the European Commission, which has accused all three of offering sweetheart deals to international companies.

Ireland is currently under instruction from the Commission to claw back €13 billion from U.S. tech firm Apple, which in 2014 benefited from an Irish corporate tax rate of 0.005 percent.

Meanwhile, Luxembourg and the Netherlands are respectively accused of offering Fiat Chrysler Automobiles and Starbucks “illegal” tax deals, the Commission said last year.

All three countries oppose the Commission’s conclusions and are individually committed to fight the decisions.

Oxfam’s research will also raise questions about just how effective the Commission’s crackdown on anti-tax avoidance can be.

Last week, a report by the European Network on Debt and Development showed that the number of sweetheart deals between EU governments and corporations has increased by almost 50 percent over the past two years — especially in Luxembourg and Belgium.

The increase comes despite the EU’s public outcry over the LuxLeaks and Panama Papers scandals, which both showed to what extent companies and individual have gone to avoid paying their dues.

In response, the Commission proposed a slew of initiatives to curb corporate tax avoidance, like the common consolidated corporate tax regime, among others.

But some of the initiatives have proved too controversial to finance ministers.

The criteria used to create a tax haven blacklist, for example, have been watered down by the Council, while a bid to grant public access to the identities of trust and fund owners across the EU has been scrapped.

Oxfam has published its report on the same day that Luxleaks whistleblowers, Antoine Deltour, Raphaël Halet, and the investigative journalist who helped break the story, Edouard Perrin, begin their appeal trial in Luxembourg.

The two helped expose controversial tax deals that Luxembourg’s authorities agreed with international companies, like IKEA and Amazon, which saved billions of euros in taxes as a result.