Tax Justice Network

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Tax Justice Network
AbbreviationTJN
FormationMarch 2003 formal
November 2002 informal
Founder28 co-founders [1]
Founded at London
Type NGO
Focus tax avoidance, tax competition, tax evasion, and tax havens.
Headquarters38 Stanley Avenue, Chesham, Buckinghamshire, HP5 2JG, United Kingdom.
Official language
English
Chief Executive
Alex Cobham
Revenue (2016)
£1,111,981 ($1,556,773)
Website www.taxjustice.net

The Tax Justice Network (TJN) is a British advocacy group [2] consisting of a coalition of researchers and activists with a shared concern about tax avoidance, tax competition, and tax havens. [3]

Contents

Activity

Research

The TJN has reported on the OECD Base erosion and profit shifting (BEPS) projects and conducted their own research that the scale of corporate taxes being avoided by multinationals is an estimated $660 billion in 2012 (a quarter of US multinationals’ gross profits), which is equivalent to 0.9% of World GDP. [4] [5]

In July 2012, following a study into wealthy individuals with offshore accounts, the Tax Justice Network published claims regarding deposits worth at least $21 trillion (£13 trillion), potentially even $32 trillion, in secretive tax havens. As a result, governments suffer a lack of income taxes of up to $280 billion. [6] [7] [8]

In November 2020, the TJN published "The State of Tax Justice 2020" report. It claims $427 billion is lost every year to tax abuse. [9] [10]

Financial Secrecy Index

The Financial Secrecy Index is a biennial publication of the TJN which was started in 2009 and was last released in February 2020. [11] It covers 133 global jurisdictions and produces a "Secrecy Indicator" score for each based on 20 qualitative criteria. Releases are widely covered in the media. [2] [12] [13] [14]

Corporate Tax Haven Index

The Corporate Tax Haven Index is a biennial publication of the TJN which had its inaugural publication in May 2019. [15] It covers 64 global jurisdictions and produces a "Corporate Tax Haven Index" value by combining two core measures; first a "Haven Score" based on 20 mostly tax related criteria, second a "Global Scale Weight" showing the scale of activity. Release are widely covered in the media. [16] [17] [18]

Publicity

Experts of TJN appeared at public hearings of the Finance Committee of the German Bundestag in 2016. [19]

Funding

TJN has been rated as 'highly transparent' in its funding by Transparify [20] and has been given an A grade for funding transparency by Who Funds You? [21]

Leadership and authors

Notable authors who have worked with TJN include accounting scholar Prem Sikka, activist Sony Kapoor, journalist Nicholas Shaxson, [26] and legal scholar Sol Picciotto. [27]

See also

Notes

  1. "Happy Birthday Tax Justice Network". TJN. 9 November 2012.
  2. 1 2 "Report Says U.S. Is World's Second-Biggest Tax Haven". Bloomberg News. 30 January 2018. The Financial Secrecy Index, an assessment of global financial centers compiled by the Tax Justice Network, a left-leaning research and advocacy group,
  3. "Core Funding Prospectus 2018–2021" (PDF). Tax Justice Network. 2018. Retrieved 24 March 2019.
  4. "Tax Avoidance Costing U.S. $189 Billion: Tax Justice Network". Bloomberg News. 23 March 2017.
  5. "Base Erosion and Profit Shifting BEPS". Tax Justice Network. 2015.
  6. "13 trillion pounds in offshore tax havens: Report". The Times of India. 22 July 2012. Retrieved 22 July 2012.
  7. "Super rich hold $32 trillion in offshore havens". Reuters. 22 July 2012. Archived from the original on 5 March 2016. Retrieved 22 July 2012.
  8. "Tax havens: Super-rich 'hiding' at least $21tn". BBC. 22 July 2012. Retrieved 22 July 2012.
  9. "The State of Tax Justice 2020" (PDF). Tax Justice Network. 20 November 2020.
  10. "$427bn a year lost to tax abuse by firms and rich individuals, study finds". The Guardian. 20 November 2020.
  11. "Financial Secrecy Index 2020 Results". Tax Justice Network. 18 February 2020.
  12. "U.S. Becomes World's Second-Biggest Tax Haven". Wall Street Journal. 30 January 2018.
  13. "UN urged to launch global effort to end offshore tax evasion". The Guardian. 30 January 2018.
  14. "Australia a safe haven for illicit funds, but Switzerland the world's worst". Sydney Morning Herald. 31 January 2018.
  15. "Corporate Tax Haven Index 2019 Results". Tax Justice Network. 28 May 2019.
  16. "UK and territories are 'greatest enabler' of tax avoidance, study says". The Guardian. 28 May 2019.
  17. "Channel Islands 'among worst tax havens' worldwide". BBC. 28 May 2019.
  18. "U.K. Islands Unravel Global Corporate Tax Order, Group Says". Bloomberg Tax. 28 May 2019.
  19. "Öffentliche Sitzung des Finanzausschusses" (in German). German Bundestag. 15 June 2016. Retrieved 16 February 2017.
  20. "Round-Up of Transparify 2018 Ratings". Transparify. 17 December 2018. Retrieved 7 July 2019.
  21. "Tax Justice Network | Who Funds You?". whofundsyou.org.
  22. "John Christensen steps down as Tax Justice Network chair". Tax Justice Network. 2 August 2021.
  23. Richard Murphy (3 August 2021). "John Christensen quits the Tax Justice Network". Tax Research UK.
  24. "Richard Murphy". Tax Research UK.
  25. Alex Cobham (2 August 2021). "The past, present and future of Tax Justice Network". Tax Justice Network.
  26. "Our History". Tax Justice Network.
  27. "Sol Picciotto, ICTD Senior Fellow". Institute of Development Studies.

Related Research Articles

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.

Tax avoidance is the legal usage of the tax regime in a single territory to one's own advantage to reduce the amount of tax that is payable by means that are within the law. A tax shelter is one type of tax avoidance, and tax havens are jurisdictions that facilitate reduced taxes. Tax avoidance should not be confused with tax evasion, which is illegal. Both tax evasion and tax avoidance can be viewed as forms of tax noncompliance, as they describe a range of activities that intend to subvert a state's tax system.

<span class="mw-page-title-main">International Financial Services Centre, Dublin</span> Financial centre in Dublin, Ireland

The International Financial Services Centre (IFSC) is an area of central Dublin and part of the CBD established in the 1980s as an urban regeneration area and special economic zone (SEZ) on the derelict state-owned former port authority lands of the reclaimed North Wall and George's Dock areas of the Dublin Docklands. The term has become a metonym for the Irish financial services industry as well as being used as an address and still being classified as an SEZ.

<span class="mw-page-title-main">Corporation tax in the Republic of Ireland</span> Irish corporate tax regime

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.

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.

<span class="mw-page-title-main">Offshore financial centre</span> Corporate-focused tax havens

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."

<span class="mw-page-title-main">Double Irish arrangement</span> Irish corporate tax avoidance tool

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.

The Financial Secrecy Index (FSI) is the report published by the advocacy organization Tax Justice Network (TJN) which ranks countries by financial secrecy indicators, weighted by the economic flows of each country.

<span class="mw-page-title-main">Base erosion and profit shifting</span> Multinational tax avoidance tools

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.

<span class="mw-page-title-main">Dutch Sandwich</span> Dutch withholding tax avoidance tool

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.

<span class="mw-page-title-main">Bermuda Black Hole</span> Corporate tax avoidance strategy

Bermuda black hole refers to base erosion and profit shifting (BEPS) tax avoidance schemes in which untaxed global profits end up in Bermuda, which is considered a tax haven. The term was most associated with US technology multinationals such as Apple and Google who used Bermuda as the "terminus" for their Double Irish arrangement tax structure.

In 2010, the United States implemented the Foreign Account Tax Compliance Act; the law required financial firms around the world to report accounts held by US citizens to the Internal Revenue Service. The US on the other hand refused the Common Reporting Standard set up by the Organisation for Economic Co-operation and Development, alongside Vanuatu and Bahrain.

The Republic of Panama is one of the oldest and best-known tax havens in the Caribbean, as well as one of the most established in the region. Panama has had a reputation for tax avoidance since the early 20th century, and Panama has been cited repeatedly in recent years as a jurisdiction which does not cooperate with international tax transparency initiatives.

<span class="mw-page-title-main">Gabriel Zucman</span> French economist

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.

The OECD G20 Base Erosion and Profit Shifting Project is an OECD/G20 project to set up an international framework to combat tax avoidance by multinational enterprises ("MNEs") using base erosion and profit shifting tools. The project, led by the OECD's Committee on Fiscal Affairs, began in 2013 with OECD and G20 countries, in a context of financial crisis and tax affairs. Currently, after the BEPS report has been delivered in 2015, the project is now in its implementation phase, 116 countries are involved including a majority of developing countries. During two years, the package was developed by participating members on an equal footing, as well as widespread consultations with jurisdictions and stakeholders, including business, academics and civil society. And since 2016, the OECD/G20 Inclusive Framework on BEPS provides for its 140 members a platform to work on an equal footing to tackle BEPS, including through peer review of the BEPS minimum standards, and monitoring of implementation of the BEPS package as a whole.

<span class="mw-page-title-main">Conduit and sink OFCs</span> Classification of tax havens

Conduit OFC and sink OFC is an empirical quantitative method of classifying corporate tax havens, offshore financial centres (OFCs) and tax havens.

<span class="mw-page-title-main">Modified gross national income</span> Metric to measure the Irish economy by excluding globalisation effects

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.

<span class="mw-page-title-main">Ireland as a tax haven</span> Allegation that Ireland facilitates tax base erosion and profit shifting

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.

<span class="mw-page-title-main">Qualifying investor alternative investment fund</span> Irish zero-tax legal structure

Qualifying Investor Alternative Investment Fund or QIAIF is a Central Bank of Ireland regulatory classification established in 2013 for Ireland's five tax-free legal structures for holding assets. The Irish Collective Asset-management Vehicle or ICAV is the most popular of the five Irish QIAIF structures, it is the main tax-free structure for foreign investors holding Irish assets.

<span class="mw-page-title-main">Taxation in Jersey</span>

Jersey is a Crown Dependency with fiscal sovereignty and therefore sets its own tax rates. The island has a 'simple and stable' tax system, which does not change much over time. This is reflected in States policies, which call for a 'low, broad, simple and fair' system. Jersey does not have inheritance, wealth, corporate or capital gains tax.