#G20 Brisbane: Five corporate tax havens around the world and how the summit can crack down on them. Currently, the Australian Tax Office can only see the local tax bill of a multi-national company, he said. But G20 leaders will likely formalise an OECD plan for countries to share information on what companies are doing internationally in regards to their taxes. United States One of the worst-offending countries when it comes to facilitating tax avoidance is – surprisingly – the US, said University of Sydney senior lecturer in business Dr Antony Ting. The research shows the US government has been knowingly helping these multi-nationals to avoid foreign tax, Dr Ting told ABC News Online. The governments justification is I want to help my companies be more competitive in the world. Ireland The tax rule in Ireland is a perfect accompaniment to the US tax laws, Dr Ting said. Last year, Apple faced criticism after paying $193 million in tax on $26 billion in profits in Australia thanks to its creative accounting practices. CEO Tim Cook was forced to face Congress and deny Apple was unfairly avoiding tax by using a method known as the double Irish. It involves a company based in the US or elsewhere setting up an Irish subsidiary, which usually only exists on paper. That subsidiary, however, while registered in Ireland, is allowed under locals laws to be taxed in another jurisdiction. In many cases, that is somewhere like the Cayman Islands or Bahamas, which have corporate tax rates of 0 per cent. Bermuda Bermuda, a British dependency, is one of several small jurisdictions - many of them islands - that does not have a corporate tax rate. Along with the Cayman Islands and the Isle of Man, it has become an attractive destination for off-shore banking and financial services firms. However, Bermuda denies it is a tax haven. Writing in The Guardian, MP Walton Brown said instead of collecting tax from companies, Bermuda charges customs duties. Luxembourg Luxembourg is a landlocked country in western Europe with a population of about 500,000. It is one of the smallest sovereign nations in Europe, and has one of the highest GDPs per capita in the world. Major international firms, including Pepsi, IKEA and FedEx, have sought deals with Luxembourg to lower their tax bill, according to emails obtained by the International Consortium of Investigative Journalists. In light of those revelations, there have been calls this week for Jean-Claude Juncker, head of the European Commission, to step down, given he was the leader of Luxembourg when the deals were allegedly reached. Mr Juncker is attending the G20 summit this week. Cayman Islands The Cayman Islands, a British Overseas Territory in the Caribbean Sea near Cuba and Jamaica, collects no corporate tax. The island, with a population of just over 50,000 and a GDP per capita of about $50,000, is considered a global hub for off-shore banking. Hundreds of international banks have branches there and the banking sector is one of the largest in the world. This development brought the scrutiny of the OECD, and in 2009 US president Barack Obama singled the Cayman Islands out as a significant tax shelter. In 2011, advocacy group the Tax Justice Network labelled the state the fourth safest tax haven in the world.
Posted on: Thu, 13 Nov 2014 11:49:56 +0000
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