FACTSHEETWhyweneedto#EndTaxHavens
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Whatisataxhaven?
Summaryofinternationaltaxscandals
We’realllosingouttotaxhavens!
Taxhavensandhumanrights
Fundingglobaldevelopment
Theimpactonpoorcountries
Womenandgirlspaythehighestprice
Howcanwechangethis?Advocacygoals
Whatcanyoudo?
Whatisataxhaven?
Ataxhavenisacountryorterritorythatenablescompaniesorwealthyindividualstododgetaxesby
movingincomeorassetstothejurisdictionfromsomewhereelse.Typicalfeaturesoftaxhavensinclude
loworzerotaxratesandhighlevelsofsecrecy.
Togetherwithtaxhaven‘enablers’intheformoflawyers,accountants,banksandlobbyists,wealthy
peopleandmultinationalcorporationshavesetupsophisticatedinternationalsystemswhichusetax
havenstoensurethattheypaylessandlesstaxontheirprofitsandwealth.Yet,thiselitegroupisentirely
dependentonpublicly-fundedinfrastructureandinstitutionsandpublicly-educatedworkforcestomake
theirmoney.Suchsystemictaxdodging(bothlegalandillegal)hasledordinarypeopletoloseoutas
wealthflowsoutwardsfromthepublicandintotheprivatehandsofthefew,hiddenawayintaxhavens.
Thisdistortseconomies,underminesdemocracyanddeprivespeopleoffundingforthevitalpublicservices
weneedtoliveandthehumanrightsweareallentitledto.
AlthoughmanypeopleimaginetaxhavensareexclusivelytropicalislandslikeBermudaortheCayman
Islands,someoftheworld’smostprominenttaxhavensincludeLuxembourg,theNetherlands,and,
increasingly,theUnitedStates.Agrowingnumberofcountriesarealsoengaginginwhattheycall‘Tax
Competition’,whichincludesintroducingthetypesofpolicieswhicharetypicalfortaxhavens(suchaslow
effectivecorporatetaxratesorotherharmfultaxpractices).
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Summaryofinternationaltaxscandals
TheGlobalLaundromatscandal
When:March2017
What:Between2011and2014,overUS$20billionfromRussiawaslaunderedthroughmorethan5000
companies,manyoftheanonymousshell-companiesintheUK.Themoneyendedupinover700different
banksin96countries,includingseveralEUcountries.
PanamaPapers:
When:April2016
What:InaglobalnewsexposécoordinatedbyICIJ,11millionleakeddocumentsfromthelawfirmMossack
FonsecainPanamarevealedaglobalnetworkofshellcompaniesandhiddenbankaccounts,whichwere
beingusedtofacilitatetaxevasion,bribery,armsdeals,financialfraudanddrugtrafficking.Theleak
showedthatsomeoftheworld’slargestbankshadbeeninvolvedinsettingupsecretoffshorestructures
fortheirclients,whichincludedalargenumberofcelebrities,including140politiciansfrom50countries.
BahamasLeaks:
When:September2016
What:MillionsofleakedfilesfromabankinJerseyandtheBahamascorporateregistryrevealedhowmore
than175.000Bahamianshell-companiesandsecretbankaccountswerebeingusedbypoliticiansandthe
richtohidetheirwealthintaxhavens.Well-paidaccountantsandsomeoftheworld’sbiggestbankswere
helpingtheirwealthyclientssetupthesedodgystructures.
SwissLeaks
When:February2015
What:AleakfromthebankHSBCinSwitzerlandrevealedhiddenbackaccountswithassetsworthmore
thanUS$100billion,withlinkstoalmosteverycountryintheworld.Theclientsincludedindividualslinked
toarm’strafficking,bribery,blooddiamondsaswellascurrentandformerpoliticiansfromaroundthe
world.Theleakshowedthatthebankkeptreassuringitsclientsthatnoinformationwouldbeprovidedto
taxadministrations,evenincaseswhereevidencesuggestedtheassetswerelinkedtotaxevasion.
LuxembourgLeaks:
When:November2014
What:Theso-calledLuxLeaksscandalrevealedhundredsofsecrettaxdeals(alsoknownas“sweetheart
deals”)betweenmultinationalcorporationsandLuxembourg.Thesedeals,whichwereoftenbrokeredby
PriceWaterhouseCoopers(PwC)allowedmanyofthecorporationstolowertheirtaxpaymentstoverylow
levels–insomecasestolessthan1%.CorporationsinvolvedinthescandalincludedPepsi,IKEA,AIG,
DeutscheBank-over300othercompaniesinall.TheLuxLeaksscandalalsobecameafamousexampleof
thelackof–andurgentneedfor–whistleblowerprotection.InMarch2017,thecourtofLuxembourg
decidedthatbothwhistleblowersinvolvedintheexposuremustpayfinestoLuxembourg,andoneofthe
whistleblowers,AntoineDeltour,receivedasuspendedprisonsentenceof6months.
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We’realllosingouttotaxhavens!
Taxesprovidethemostsustainablesourceofgovernmentrevenue-usedtopayforthevastmajorityof
publicservicesthatourfamiliesandcommunitiesrelyon.Yet,taxdodgingandtaxbreakstobigbusinesses
costdevelopingcountriesbillionsUSdollarseveryyear.Conservativeestimateshavefoundthatonetype
ofcorporatetaxavoidancealoneiscostingdevelopingcountriesbetweenUS$70billionand$120billion
peryear.1
Thegrowingnumberofrecenttaxhavenexposés–includingthePanamaPapers,LuxLeaks,SwissLeaksand
BahamasLeaks–hasbroughttotheforethehumancostsofglobaltaxavoidanceandevasionthatare
facilitatedbytaxhavens.Everydollarlosttotaxhavens,isadollarthatcouldhavebeeninvestedinpublic
services-topaydoctorsandteachers,fundvaccinations,orinvestinschoolseatsforchildren.Revenuelost
totaxhavensisfuellingpovertyandexacerbatinginequalityacrosstheworld.Whenpublicservicesare
deprivedoffunding,thepoorestpeople-especiallywomenandgirls,paythehighestprice.
Taxhavensandhumanrights
Taxisfundamentalfortherealizationofhumanrights,notonlybecauseitisnecessaryforensuring
sufficientresources,butalsobecausetaxpolicyplaysafundamentalroleinredressinginequalitiesandin
shapinghowaccountablegovernmentsaretotheirpeople.
Acrosstheworld,stateshaveanobligationtorespecthumanrightsandmanyofourinternationalhuman
rightsinstrumentsrequirestatestoinvestthe"maximumavailableresources"indoingso.
Yetmanycountriesstruggletocollectsufficientrevenuetofundpublicservicesessentialforpeopleto
realizefundamentalrightssuchastohealth,education,housing,accesstojusticeandanadequate
standardofliving.
Rightnow,taxhavensareallowingmultinationalcorporationsandwealthypeopletodeliberatelypayless
andlesstaxontheirprofitsandwealth.Theseinequitabletaxrulesreducethefinancingavailableforpublic
servicestomeethumanrights.TheUnitedNationsSpecialRapporteuronextremepovertyandhuman
rights,aswellasvariousUNtreatybodiesandhumanrightsexperts,suggest thatpolicieswhichallow
large-scaletaxdodgingmaybeinbreachofthehumanrightsobligationsofgovernments.
Fundingglobaldevelopment
Worldleadershavecommittedtoabrighterfuture
in2030wherepovertyandinequalitiesaretackled,
butgovernmentsnowneedtoprogressivelyraise
andspendmoredomesticresourcestomakethis
happen.TheUNestimatesitwillcostUS$1.4
trillionperyeartoreachtheSustainable
DevelopmentGoalsinlow-andlower-middleincomecountries.Butwherewillthismoneycome
from?
TaxJusticeNetworkestimatedconservativelythat
USD$21-32trillioninfinancialassetssitoffshore,largelyuntaxed.Itisessentialthatcompaniesand
wealthyindividualspayafairshareoftaxinthecountriestheyoperatein,andthatourgovernmentsuse
thismoneytofundpublicservices,realisehumanrightsandachievetheSustainableDevelopmentGoals.
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UNCTAD. (2015). World Investment Report 2015: Reforming international investment governance: Accessed 3 October
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Theimpactonpoorcountries
Shiftingprofitstotaxhavenscanbeespeciallydamagingtopoorercountrieswhichdesperatelyneedtax
revenuetopayforpublicservicesandtacklepoverty.ThedatareleasedbytheSwissLeaksexposerevealed
thatUS$48.3millionlinkedtoZambiawassittinginSwissbankaccounts.Atthesametime,theZambian
governmentstrugglestofundpublicservicestomeettheircitizen’srights,with47%ofchildrennot
completingprimaryeducationand60%ofthepopulationlivingbelowthepovertyline.Large-scale
corporatetaxdodginghasadisproportionatelyhardimpactondevelopingcountries,whicharehighly
reliantoncorporatetaxationasasourceofincome.
Womenandgirlsarepayingthehighestprice
Womenandgirlstendtobeimpactedthemostwhenpublicservicesareunderfunded.Forexample,the
dangersofchildbirthmeanwomensuffermorewhenhealthcareservicesareunderfunded.Inpoor
countries,whenschoolingisnotfree,familiesoftenprioritisesendingboysovergirls.
Rightnow,women’sandgirls’unpaidworkissubsidisingeconomicgrowth.
Womenspend2.5timesmoretimeperformingunpaidcareanddomesticworkthanmen,whichhasbeen
valuedat13%ofglobalGDP.Wherestatesdon’traiseenoughrevenuetoprovidevitalpublicservicessuch
ashealthcare,educationandchildcare,itismorelikelytobewomenwhofillthegapwiththeirbodiesand
unpaidwork,reducingthetimetheyhaveforeducation,paidemploymentandrestandleisure.
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Howcanwechangethis?Advocacygoals
Togetherwe’rebuildingpublicandpoliticalmomentumgloballytoendtaxhavens,bycallingonour
governmentsto:
1. Requirepubliccountry-by-countryreportingforallmultinationalcorporations.Thiswouldbea
responsetolarge-scaletaxavoidancebymultinationalcorporations–suchaswasrevealedby,for
example,theLuxLeaksscandal.Ifalllargemultinationalcorporationswereobligedtocarryout
publiccountry-by-countryreporting,thepublicwouldbeallowedtoseewhereeachcorporationis
doingbusinessandhowmuchtaxesitpaysineachcountrywhereitoperates.Thiswouldmakeit
moredifficultformultinational
corporationstoavoidtaxation.Public
country-by-countryreportinghasalready
beenintroducedforbanksinthe
EuropeanUnion,whichiscurrently
discussingwhethertointroduceitforall
sectors.Therearemanygoodarguments
forwhypubliccountry-by-country
reportingisagoodidea–seefor
examplethesetenreasons.Seealsothis
briefingonwhypubliccountry-bycountryreportingisamust.
2. Establishpublicregistersofthereal“beneficial”ownersoftrustsandcompanies.Thiswouldbea
responsetotheproblemsrevealedin,forexample,thePanamaPapers,theGlobalLaundromat
scandalandBahamasLeaks.Publicregisterswouldallowthepublictoseewhotrulyownsthe
trustsandcompaniesoperatinginoursocieties,andmakeitmoredifficultfortaxevadersand
othercriminalstohidetheirfortunesinanonymoustrustsandshellcompanies.Publicregisters
havebeenintroducedintheUKandSlovakia,andwillsoonbecomearealityinforexample
DenmarkandSlovenia.
3. SupporttheestablishmentofaninclusiveintergovernmentalUNGlobalTaxBody,whereall
countrieshaveanequalsayinsettinginternationaltaxstandards.Taxhavensareaglobalproblem,
whichultimatelyrequiresaglobalsolution.AnintergovernmentalUNtaxbodywouldbecomethe
keynegotiatingforumforgovernmentsinthesamewayastheUNclimatenegotiationsisthekey
forumforaddressingclimatechange.Today,however,theglobalstandardsontaxand
transparencyaresetbybodiessuchastheG20andtheOECD–alsoknownasthe‘RichCountries’
Club’.Meanwhile,morethan100developingcountriesareexcludedfromthedecisionmaking.At
thesametime,thenegotiationsinG20andOECDarehighlysecretiveandoftenhiddenfromthe
public.AtrulyglobalintergovernmentalUNtaxbodywouldcreateaspaceforgovernmentsto
committoaglobalsolutiontotheglobalproblemoftaxhavens,andwouldcreateamore
transparentdecisionmakingbody,whichiskeytoensuringthatcitizenscanholdtheir
governmentstoaccount.Seethisbriefingonwhyweneedanintergovernmentaltaxbodyandthis
Q&Aonfrequentlyaskedquestions.
4. Usetaxrevenuestofundthepublicservicesandsocialprotectionsasvitalmeanstoending
povertyandinequality.Governmentsmustcommittoensuringthattheincreasedrevenuewillbe
spentonendingpovertyandinequality,includingbyensuringpublicservicesforall.
5. Protectwhistleblowers.GlobalexposuressuchasthePanamaPapersandtheLuxembourgLeaks
weremadepossiblebywhistleblowerswhotookactioninthepublicinteresttopromotejustice
andreveallarge-scaletaxdodging.Today,whistleblowersarenotprotectedfromprosecutionand
riskfacingseverepenaltiesdespitethefactthattheyactedintheinterestofthepublic.Thiswas
forexamplethecasefortheLuxLeakswhistleblowers,whichwererecentlysentencedbythecourt
ofLuxembourg.
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Whatcanyoudo?
VisittheGlobalAllianceforTaxJustice#EndTaxHavensGlobalWeekofActionpagetofindouthowyou
cangetinvolved.Download#EndTaxHavensresourcesincludingacampaigntoolkit,mediapitch,op-ed,
socialmediapostsandcreativeactionideas!
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