Dhammika Dharmapala | |
|---|---|
| Born | Anurudha Udeni Dhammika Dharmapala 1969or1970(age 53–54) |
| Academic career | |
| Field | Public economics |
| Institutions | University of Chicago Law School, University of Illinois |
| Alma mater | University of Western Australia (BEc, MEc) University of California, Berkeley (PhD) |
| Doctoral advisor | Alan J. Auerbach |
| Contributions | |
| Information at IDEAS / RePEc | |
| Website | Faculty website |
Dhammika Dharmapala (born 1969/1970) [1] is an economist who is the Paul H. and Theo Leffman Professor of Law at the University of Chicago Law School. He is known for his research into corporate tax avoidance, corporate use of tax havens, and the corporate use of base erosion and profit shifting ("BEPS") techniques. [2]
Dharmapala was born in Sri Lanka, educated in Australia, and settled in the U.S. (he is a naturalized U.S. citizen), [3] [4] to pursue a career as an academic economist. [1] He taught economics at the University of Connecticut and law at the University of Illinois, Urbana-Champaign before joining the Chicago faculty in 2014. [5]
Dharmapala's research on tax havens, often with James R. Hines Jr., is cited as important. [6] [7] In addition to his role as professor at the University of Chicago Law School, Dharmapala is an International Research Fellow at the Oxford University Centre for Business Taxation, and has served on the board of directors of the American Law and Economics Association and the National Tax Association. [8] Dharmapala is sometimes interviewed in the main U.S. financial media on U.S. corporate tax issues. [9] [10] [11]
Because it is cited as one of the important papers on the research of tax havens, [6] [12] the 48 jurisdictions from the Dharmapala-Hines 2009 paper are listed below, per the markings in the paper (♣ & †): [13]
6 of the 7 tax havens that Dharmapala-Hines identified in 2009, but which have never appeared in any OECD list (e.g. marked as †), namely, Ireland, Luxembourg, the Netherlands, Hong Kong, Singapore and Switzerland, would become ranked in the world's top ten global tax havens, when academics used quantitative methods to analyse tax havens (i.e. the "OECD havens", plus Singapore and Hong Kong). [14]
(†) Tax havens that were in the 41 from the Hines-Rice 1994 list, but not in the 35 from the OECD 2000 list (the largest), [15] which include the four "OECD tax havens". [14]
(♣) Tax havens that were in the 35 from the OECD 2000 list (the largest), [15] but not in the 41 from the Hines-Rice 1994 list.
Corporate haven, corporate tax haven, or multinational tax haven is used to describe a jurisdiction that multinational corporations find attractive for establishing subsidiaries or incorporation of regional or main company headquarters, mostly due to favourable tax regimes, and/or favourable secrecy laws, and/or favourable regulatory regimes.
Ireland's Corporate Tax System is a central component of Ireland's economy. In 2016–17, foreign firms paid 80% of Irish corporate tax, employed 25% of the Irish labour force, and created 57% of Irish OECD non-farm value-add. As of 2017, 25 of the top 50 Irish firms were U.S.–controlled businesses, representing 70% of the revenue of the top 50 Irish firms. By 2018, Ireland had received the most U.S. § Corporate tax inversions in history, and Apple was over one–fifth of Irish GDP. Academics rank Ireland as the largest tax haven; larger than the Caribbean tax haven system.
The Tax Justice Network (TJN) is a British advocacy group consisting of a coalition of researchers and activists with a shared concern about tax avoidance, tax competition, and tax havens.
A tax haven is a term, often used pejoratively, to describe a place with very low tax rates for non-domiciled investors, even if the official rates may be higher.
A tax inversion or corporate tax inversion is a form of tax avoidance where a corporation restructures so that the current parent is replaced by a foreign parent, and the original parent company becomes a subsidiary of the foreign parent, thus moving its tax residence to the foreign country. Executives and operational headquarters can stay in the original country. The US definition requires that the original shareholders remain a majority control of the post-inverted company. In US federal legislation a company which has been restructured in this manner is referred to as an "inverted domestic corporation", and the term "corporate expatriate" is also used.
Joel Brian Slemrod is an American economist and academic, currently serving as a professor of economics at the University of Michigan and the Paul W. McCracken Collegiate Professor of Business Economics and Public Policy at the Stephen M. Ross School of Business at the University of Michigan.
An offshore financial centre (OFC) is defined as a "country or jurisdiction that provides financial services to nonresidents on a scale that is incommensurate with the size and the financing of its domestic economy."
The Double Irish arrangement was a base erosion and profit shifting (BEPS) corporate tax avoidance tool used mainly by United States multinationals since the late 1980s to avoid corporate taxation on non-U.S. profits. It was the largest tax avoidance tool in history. By 2010, it was shielding US$100 billion annually in US multinational foreign profits from taxation, and was the main tool by which US multinationals built up untaxed offshore reserves of US$1 trillion from 2004 to 2018. Traditionally, it was also used with the Dutch Sandwich BEPS tool; however, 2010 changes to tax laws in Ireland dispensed with this requirement.
Base erosion and profit shifting (BEPS) refers to corporate tax planning strategies used by multinationals to "shift" profits from higher-tax jurisdictions to lower-tax jurisdictions or no-tax locations where there is little or no economic activity, thus "eroding" the "tax-base" of the higher-tax jurisdictions using deductible payments such as interest or royalties. For the government, the tax base is a company's income or profit. Tax is levied as a percentage on this income/profit. When that income / profit is transferred to a tax haven, the tax base is eroded and the company does not pay taxes to the country that is generating the income. As a result, tax revenues are reduced and the country is disadvantaged. The Organisation for Economic Co-operation and Development (OECD) define BEPS strategies as "exploiting gaps and mismatches in tax rules". While some of the tactics are illegal, the majority are not. Because businesses that operate across borders can utilize BEPS to obtain a competitive edge over domestic businesses, it affects the righteousness and integrity of tax systems. Furthermore, it lessens deliberate compliance, when taxpayers notice multinationals legally avoiding corporate income taxes. Because developing nations rely more heavily on corporate income tax, they are disproportionately affected by BEPS.
Dutch Sandwich is a base erosion and profit shifting (BEPS) corporate tax tool, used mostly by U.S. multinationals to avoid incurring European Union withholding taxes on untaxed profits as they were being moved to non-EU tax havens. These untaxed profits could have originated from within the EU, or from outside the EU, but in most cases were routed to major EU corporate-focused tax havens, such as Ireland and Luxembourg, by the use of other BEPS tools. The Dutch Sandwich was often used with Irish BEPS tools such as the Double Irish, the Single Malt and the Capital Allowances for Intangible Assets ("CAIA") tools. In 2010, Ireland changed its tax-code to enable Irish BEPS tools to avoid such withholding taxes without needing a Dutch Sandwich.
Gabriel Zucman is a French economist who is currently an associate professor of public policy and economics at the University of California, Berkeley‘s Goldman School of Public Policy, Chaired Professor at the Paris School of Economics, and Director of the EU Tax Observatory.
Leprechaun economics was a term coined by economist Paul Krugman to describe the 26.3 per cent rise in Irish 2015 GDP, later revised to 34.4 per cent, in a 12 July 2016 publication by the Irish Central Statistics Office (CSO), restating 2015 Irish national accounts. At that point, the distortion of Irish economic data by tax-driven accounting flows reached a climax. In 2020, Krugman said the term was a feature of all tax havens.
Mihir A. Desai is an Indian-American economist currently the Mizuho Financial Group Professor of Finance at Harvard Business School and Professor at Harvard Law School. He graduated from Brown University with a bachelor's degree of history and economics in 1989, earned an MBA from Harvard Business School in 1993 and a PhD in Political Economy from Harvard University in 1998.
Conduit OFC and sink OFC is an empirical quantitative method of classifying corporate tax havens, offshore financial centres (OFCs) and tax havens.
Apple's EU tax dispute refers to an investigation by the European Commission into tax arrangements between Apple and Ireland, which allowed the company to pay close to zero corporate tax over 10 years.
Modified gross national income is a metric used by the Central Statistics Office (Ireland) to measure the Irish economy rather than GNI or GDP. GNI* is GNI minus the depreciation on Intellectual Property, depreciation on leased aircraft and the net factor income of redomiciled PLCs.
Ireland has been labelled as a tax haven or corporate tax haven in multiple financial reports, an allegation which the state has rejected in response. Ireland is on all academic "tax haven lists", including the § Leaders in tax haven research, and tax NGOs. Ireland does not meet the 1998 OECD definition of a tax haven, but no OECD member, including Switzerland, ever met this definition; only Trinidad & Tobago met it in 2017. Similarly, no EU–28 country is amongst the 64 listed in the 2017 EU tax haven blacklist and greylist. In September 2016, Brazil became the first G20 country to "blacklist" Ireland as a tax haven.
James R. Hines Jr. is an American economist and a founder of academic research into corporate-focused tax havens, and the effect of U.S. corporate tax policy on the behaviors of U.S. multinationals. His papers were some of the first to analyse profit shifting, and to establish quantitative features of tax havens. Hines showed that being a tax haven could be a prosperous strategy for a jurisdiction, and controversially, that tax havens can promote economic growth. Hines showed that use of tax havens by U.S. multinationals had maximized long-term U.S. exchequer tax receipts, at the expense of other jurisdictions. Hines is the most cited author on the research of tax havens, and his work on tax havens was relied upon by the CEA when drafting the Tax Cuts and Jobs Act of 2017.
The European Union tax haven blacklist, officially the EU list of non-cooperative tax jurisdictions, is a tool of the European Union (EU) that lists tax havens. It is used by the Member States to tackle external risks of tax abuse and unfair tax competition. It was adopted for the first time in 2017 as a response to tax avoidance in the EU, screening 92 countries. It is managed by the Code of Conduct Group for Business Taxation and monitored by the European Commission (EC). The most recent revision was released on 6 October 2020. The list is updated twice a year.
The global minimum corporate tax rate, or simply the global minimum tax, is a minimum rate of tax on corporate income internationally agreed upon and accepted by individual jurisdictions in the OECD/G20 Inclusive Framework. Each country would be eligible for a share of revenue generated by the tax. The aim is to reduce tax competition between countries and discourage multinational corporations (MNC) from profit shifting that avoids taxes.
CHAMPAIGN – University of Illinois Law Professor Dhammika Dharmapala , a Hindu from Sri Lanka and a naturalized U.S. citizen, was the victim of a shocking violent attack this week at a train station. [..] Dharmapala, 41, teaches law and economics, tax policy, public economy, and political economy. [..] Professor Dharmapala earned his master's degree in economics from the University of Western Australia and his Ph.D. in economics from the University of California-Berkeley.
Professor Dharmapala is recognized as one of the leading experts on profit shifting, through his innovative research on the magnitude of profit shifting and his recent survey of the empirical profit shifting literature.
Dharmapala, a U.S. citizen [..]
Figure D: Tax Haven Literature Review: A Typology
Concerning the characterization of tax havens, we follow the definition proposed by Hines and Rice (1994) which has been recently used by Dharmapala and Hines (2009).
Tax Havens by Most Cited
Appendix A: List of Tax Havens
The four OECD member countries Luxembourg, Ireland, Belgium and Switzerland, which can also be regarded as tax havens for multinationals because of their special tax regimes.
TAX HAVENS: 1.Andorra 2.Anguilla 3.Antigua and Barbuda 4.Aruba 5.Bahamas 6.Bahrain 7.Barbados 8.Belize 9.British Virgin Islands 10.Cook Islands 11.Dominica 12.Gibraltar 13.Grenada 14.Guernsey 15.Isle of Man 16.Jersey 17.Liberia 18.Liechtenstein 19.Maldives 20.Marshall Islands 21.Monaco 22.Montserrat 23.Nauru 24.Net Antilles 25.Niue 26.Panama 27.Samoa 28.Seychelles 29.St. Lucia 30.St. Kitts & Nevis 31.St. Vincent and the Grenadines 32.Tonga 33.Turks & Caicos 34.U.S. Virgin Islands 35.Vanuatu
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