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Tax Haven Share 2021

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Tax Haven Countries 2024

A tax haven, or “offshore financial center,” is a country (or state) in which foreign investors pay taxes at an abnormally low rate, possibly even zero. By shifting their funds into or through tax havens, businesses and other investors can avoid paying taxes in high-tax countries. Residency or business presence is typically not required in order to benefit from a tax haven's policies (though it may be in tax-free countries. Additionally, tax havens share little or none of their investors' financial information with foreign tax authorities.

These policies attract a generous amount of capital inflow for tax havens, which may impose mild fees, charges, or a minimal tax on foreign investments in order to generate government revenue. This inflow of funds, which is substantial even with the haven's low-to-zero tax rates, facilitates economic growth in the tax haven country.

Top 10 Tax Haven Countries in the World - Tax Justice Network 2021 (CTHI value):

Legal issues with tax havens

Tax havens exist in a legal gray area in that many of the activities associated with them are legal, but many are not. For example, using a tax haven to store funds earned overseas, thereby avoiding paying higher taxes in one's home country, is legal. So is funneling investments in a trust or company through a tax haven. On the other hand, using a tax haven to hide earnings entirely, or to launder money earned through illegal means, is not legal.

Although the definition of what exactly counts as a tax haven differs from source to source, modern tax havens typically adhere to guidelines set out by regulatory bodies such as the Organization of Economic Cooperation and Development (OECD) and the U.S. Government Accountability Office. Modern corporate tax havens have high levels of OECD compliance and establish bilateral tax treaties, which are legal agreements between two countries that reduce the rate of taxation for businesses located in one country but earning money in another. Many tax havens have the ability to legally enable tax treaties close to zero by using base erosion and profit shifting tools (BEPS).

The world's most renowned tax havens

British Virgin Islands

Considered by many to be the world's leading tax haven, this British Colony's economy holds more than 5,000 times its worth in foreign investments. Local officials claim the country is not a tax haven, but this argument is undermined by the fact that the BVI has a mere 36,000 residents, but is the listed home of more than 400,000 companies and holds approximately $1.5 trillion (USD) in assets.

Luxembourg

One of the world's richest countries, Luxembourg is also one of the world's leading tax havens. According to a report from Citizens for Tax Justice and U.S. PIRG Education Fund, approximately 30% of U.S. Fortune 500 companies have subsidiaries in Luxembourg. For example, web retailer Amazon.com funnels all of its sales in Europe through its official European headquarters in Luxembourg.

Cayman Islands

The Cayman Islands recently held banking assets equal to one-fifteenth of the world’s $30 trillion in total banking assets. In addition to having no corporate tax, the Cayman Islands impose no direct taxes on residents, including property, income, and payroll taxes. The Caymans are especially popular with hedge fund managers because the corporate and income tax rates are 0%, even on interest or dividends earned on an investment. The Caymans are home to subsidiaries of Fortune 500 companies such as Pepsi, Marriott, and Wells Fargo.

Bermuda

Most consumers know this U.K. island territory for its tourist-friendly beaches, but those in the financial sector may also know it as a notoriously popular tax haven. Bermuda's Gross Domestic Product (GDP) per capita is abnormally high thanks to its lack of taxes on corporate income, interest, dividends, and royalties. These tax rates have induced companies such as Google and Nike to park billions of dollars in accounts in Bermuda, thereby avoiding U.S. taxes.

Netherlands

The Netherlands' former finance minister, Jan Kees de Jager, has been quoted as saying the country's financial systems are far less exploitable than those of Switzerland or the Cayman Islands. However, it is likely that Google, Fiat Chrysler, IBM, and the many Fortune-500 companies lowering their taxes by funneling their profits through Dutch subsidiaries feel otherwise.

Switzerland

Switzerland is known worldwide for the secrecy of its banking sector, which holds the details of its clients' financial accounts and dealings in strict confidence. This trustworthiness makes it easy for both individuals and corporations alike to hide wealth with great effectiveness. Moreover, although some of Switzerland's laws regarding secrecy have been removed, the country's tax rates remain quite favorable.

United States

Although not a tax haven to the same degree as the other countries listed, the United States offers a unique tax scenario thanks to the fact that each state sets its own income tax rates. As such, states with no income tax, such as Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, Washington, and Wyoming, can often be utilized as tax havens by countries wishing to minimize their tax burden.

  • The Haven Score for each jurisdiction is constructed from 20 Haven Indicators, which reflect the many different rules, laws and mechanisms that multinationals can use to escape tax. The index grades each country’s tax and legal system with a “haven score” out of 100 where a zero represents no scope for corporate tax abuse and a 100 is unrestrained scope for corporate tax abuse.
  • CTHI Value: A measure of how intensely the jurisdiction enables multinational corporations to abuse corporate tax, calculated by combining Haven Score and Global Scale Weight.
  • The Financial Secrecy Index (FSI):The Financial Secrecy Index is a ranking of jurisdictions most complicit in helping individuals to hide their finances from the rule of law. Lower scores are better.

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Country
Tax Haven Share 2021
Tax Haven Score 2021
FSI Share 2022
FSI Score 2022
Global Inflicted Tax Loss
British Virgin Islands6.45%100.001.83%70.702.31%
Cayman Islands5.99%100.001.52%72.6011.19%
Bermuda5.67%100.000.72%70.104.61%
Netherlands5.54%79.901.63%64.6012.27%
Switzerland5.11%88.603.43%70.003.67%
Luxembourg4.1%74.002.36%55.005.85%
Hong Kong4.08%77.902.73%65.004.03%
Jersey3.89%100.001.35%63.501.72%
Singapore3.87%84.603.43%67.204.16%
United Arab Emirates3.76%98.301.91%79.200.16%
Ireland3.3%77.101.05%47.204.08%
Bahamas3.28%100.001.13%75.500.29%
United Kingdom3.12%69.201.61%47.2012.83%
Cyprus3.12%85.301.5%61.500.15%
Mauritius2.29%81.400.64%70.100.15%
Belgium2.2%72.801.06%52.500.44%
Guernsey2.16%98.301.79%70.700.23%
France2.05%66.901.01%47.900.88%
China2.03%62.501.7%66.500%
Isle of Man1.92%100.000.56%65.000.82%
Malta1.72%79.100.91%54.500.26%
Spain1.55%64.801.02%56.600.29%
Germany1.43%58.002%56.700%
Hungary1.35%72.000.46%55.200.06%
United States1.16%46.905.74%67.404.2%
Sweden1.05%60.700.5%44.600.25%
Italy1%57.601.16%54.900.94%
Panama0.93%72.201.4%72.700.61%
Curacao0.8%72.500.35%76.000.06%
Gibraltar0.79%66.400.32%66.801.53%
Mexico0.73%54.100.41%53.101.22%
Finland0.69%59.800.35%51.800.56%
Austria0.68%55.700.79%54.600.18%
Denmark0.67%56.400.41%49.000.64%
Turks and Caicos Islands0.66%100.000.17%75.700%
Liechtenstein0.66%70.700.64%72.200.01%
Estonia0.58%70.000.14%44.200%
Anguilla0.58%100.000.59%75.500.01%
Costa Rica0.57%67.500.27%55.800.11%
Romania0.56%61.900.52%59.400%
Latvia0.54%73.100.33%55.300.01%
Lebanon0.5%75.100.44%64.600%
Monaco0.46%67.400.19%73.500%
South Africa0.45%49.400.77%60.000%
Liberia0.42%67.700.84%73.200.11%
Macau0.39%58.101%63.100.01%
Bulgaria0.38%58.400.26%52.800.04%
Seychelles0.37%68.500.35%72.200.03%
Portugal0.35%48.900.59%56.900.08%
Slovakia0.35%55.200.3%53.200%
Poland0.33%46.400.36%46.000%
Croatia0.3%55.700.3%53.100.03%
Lithuania0.28%56.600.28%51.000%
Taiwan0.22%43.501.42%60.100%
Greece0.21%46.500.3%52.800%
Slovenia0.21%51.900.07%35.900%
Aruba0.21%70.100.47%70.900.01%
Botswana0.18%54.900.24%56.800%
Ghana0.15%51.700.49%52.700.01%
Peru0.15%42.500.26%54.100.05%
Andorra0.15%61.300.24%55.000%
Kenya0.14%49.700.83%66.700%
Brazil0.12%29.300.4%49.100.42%
Tanzania0.11%47.800.33%68.800%
Ecuador0.1%42.700.21%52.200%
San Marino0.09%60.500.03%60.400%
Argentina0.08%32.000.24%49.100.46%
Gambia0.03%49.800.06%72.700%
Montserrat0.01%65.300.01%73.800%
India0%0.94%54.700%
Indonesia0%0.5%55.800.13%
Pakistan0%0.47%66.300%
Nigeria0%0.8%64.800%
Bangladesh0%0.68%74.600%
Russia0%0.8%59.600%
Japan0%2.25%63.100%
Philippines0%0.48%67.100%
Egypt0%0.62%68.200%
Vietnam0%1.1%80.900%
Iran0%0%0.05%
Turkey0%0.59%61.100%
Thailand0%1.12%69.800%
Myanmar0%0%0.01%
Colombia0%0.26%54.300%
Iraq0%0%0.13%
Algeria0%0.99%79.100%
Canada0%1.03%51.102.41%
Morocco0%0.43%66.000.01%
Ukraine0%0.37%58.900%
Angola0%0.99%79.500%
Saudi Arabia0%1.06%69.007.99%
Uzbekistan0%0%0.02%
Mozambique0%0%0.01%
Malaysia0%0.87%65.800.94%
Venezuela0%0.49%71.900.01%
Cameroon0%0.41%70.200%
Australia0%0.94%56.100.11%
Burkina Faso0%0%0.01%
Sri Lanka0%0.71%75.800%
Kazakhstan0%0.43%62.900%
Chile0%0.47%59.800%
Guatemala0%0.78%74.800%
Cambodia0%0%0.01%
Zimbabwe0%0%0.01%
Guinea0%0%0.02%
Rwanda0%0.31%72.100%
Bolivia0%0.26%79.200%
Tunisia0%0.3%59.600%
Dominican Republic0%0.37%64.700%
Jordan0%0.5%71.900.04%
Papua New Guinea0%0%0.07%
Israel0%0.99%59.300%
Serbia0%0.25%54.400.09%
Paraguay0%0.21%66.200.02%
El Salvador0%0.32%60.500%
Norway0%0.74%53.301.12%
New Zealand0%0.68%63.000%
Oman0%0.75%73.500.06%
Kuwait0%0.98%74.600.01%
Georgia0%0%0.01%
Mongolia0%0%0.01%
Uruguay0%0.48%58.000.1%
Puerto Rico0%0.52%78.301.31%
Bosnia and Herzegovina0%0%0.01%
Albania0%0.14%54.500%
Qatar0%1.21%73.600.09%
Namibia0%0.33%71.300%
North Macedonia0%0.14%62.000%
Trinidad and Tobago0%0.12%69.000%
Bahrain0%0.56%68.200.06%
Timor Leste0%0%0.03%
Eswatini0%0%0.05%
Fiji0%0.17%70.300%
Montenegro0%0.18%60.700%
Maldives0%0.34%75.200%
Brunei0%0.08%73.300%
Belize0%0.22%75.100.02%
Iceland0%0.13%42.500%
Vanuatu0%0%0.05%
New Caledonia0%0%0.02%
Barbados0%0.52%73.700.64%
Samoa0%0.27%73.000.04%
Saint Lucia0%0.1%72.200%
Guam0%0.09%70.300%
Grenada0%0.11%65.900%
Antigua and Barbuda0%0.13%77.000%
Dominica0%0.13%65.200%
Saint Kitts and Nevis0%0.49%77.200%
American Samoa0%0.09%69.300.01%
Marshall Islands0%0.69%71.200.17%
Cook Islands0%0.11%69.800.01%
Nauru0%0.04%59.100%
showing: 152 rows

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Country
TJN CTHI 2021
Investopedia 2022
Go Banking 2021
ThinkAdvisor 2021
Corpnet "Sink" 2017
Mapped FSI 2020
China896
United States514
Brazil54
Mexico324
Germany634
Thailand7.43
Tanzania50
United Kingdom1,382
France908
South Africa198
Italy443
Kenya62
Spain688
Argentina36
Poland144
Ghana68
Peru68
Taiwan982,278
Romania248
Ecuador43
Netherlands2,454XX
Sweden467
Czech Republic269
Greece93
Portugal157
Hungary599
United Arab Emirates1,664X8.67
Switzerland2,261XX7.70
Hong Kong1,805X8.0814
Bulgaria169
Singapore1,714XX7.85
Denmark295
Slovakia154
Finland304
Liberia18717
Costa Rica253
Lebanon222
Ireland1,459X
Panama4118.09
Croatia131
Puerto RicoX
Gambia13
Qatar9.16
Botswana80
Lithuania123
Slovenia93
Latvia239
Estonia257
Mauritius1,012X75
Cyprus1,3797.1262
Guyana14
Macau174
Luxembourg1,814XX71
Malta763X7.48100
Belize38
Bahamas1,454X8.7940
Samoa277
Curacao352115
Jersey1,724X7.93397
Seychelles16660
Aruba94
Isle of Man850X7.58
Andorra67
Cayman Islands2,653XX9.103311,575
Bermuda2,508XX7.73374
Guernsey954
Turks and Caicos Islands290
Marshall Islands100
Liechtenstein291225
Monaco206X11
San Marino41
Gibraltar34834
British Virgin Islands2,853XX9.025,235
Anguilla25527
Nauru67
Montserrat3
showing: 76 rows

Tax Haven Countries 2024

Which country is often considered the best tax haven?

British Virgin Islands

is the best tax haven, with 6.45%.

Frequently Asked Questions

Sources