British overseas territories occupy the top three places in the Tax Justice Network’s top 10 list of the world’s tax havens.
The British Virgin Islands is top of the pile, being labelled the “greatest enabler of corporate tax abuse”. The Cayman Islands is in second place and Bermuda third.
Britain was listed at number 13, and alongside its network of satellite territories was singled out by the TJN for providing the widest scope for international corporations to cut their tax bills.
The United Arab Emirates (UAE) was a new entry into the top 10 after an investigation found it had benefited from $250bn (£180bn) of multinational funds routed through the Netherlands.
A spokesperson for the TJN said tax havens were thriving, with the report’s findings showing the biggest economies in the world were helping companies avoid $245bn in tax.
Its Corporate Tax Haven Index ranks each country based on how intensely its tax and financial systems allow multinational corporations to lower their taxable profits. Grading each country’s tax and legal system with a “haven score” out of 100, the BVI, the Cayman Islands and Bermuda all gained the maximum score.
“A higher rank on the index does not necessarily mean a jurisdiction’s corporate tax laws are more aggressive, but rather that the jurisdiction in practice plays a bigger role globally in enabling the profit shifting that costs countries billions in lost tax every year,” the spokesperson said.
The report said OECD countries were responsible for 39% of the world’s corporate tax abuse risks. Their territories and former colonies – such as the UK’s independent territories and Jersey, Guernsey and the Isle of Man, which are crown dependencies – were responsible for 29%.
The top 10 biggest enablers of global corporate tax abuse
1 British Virgin Islands (British overseas territory)
2 The Cayman Islands (British overseas territory)
3 Bermuda (British overseas territory)
7 Hong Kong
8 Jersey (British crown dependency)
10 United Arab Emirates