MUMBAI: The first ever ‘Corporate Tax Haven Index’, released on Tuesday evening by means of the Tax Justice Network (TJN), has identified the United Kingdom with its community of British out of the country territories — similar to British Virgin Islands, Bermuda and Cayman Islands — as the most important enabler of company tax avoidance. These 3 island countries crowned the index, while the United Kingdom itself was once ranked at 13. Netherlands and Switzerland were placed at four and five respectively.
TJN, an independent analysis based global community, estimates that $500 billion is dodged each yr in tax by means of multinationals by means of use of a community of favourable tax countries. The index covers 64 countries, which are ranked in response to a ‘company tax haven’ rating. Some of the preferred countries, through which FDI is routed into India, featured a few of the best 25 countries in this index.
Other countries included in the index were Singapore (rank 8), UAE (12), Mauritius (14) and Cyprus (18). According to TJN, 52% of the world’s company tax avoidance risks may also be attributed to the top 10 countries in the index (see graphic).
Based at the ‘company tax haven’ rating, the index displays how aggressively countries (tax havens) use low or nil company taxes, loopholes, secrecy, lax anti-abuse provisions and aggressive tax treaties (which provide benefits to stakeholders). Through these, they attract MNCs and allow them to flee or undermine tax laws in different countries.
It has a ripple effect as different countries, to claw back foreign investments, lodge to tax competitiveness. The index additionally elements in a global scale weight, which measures the presence of a rustic in cross-border transactions.
Tax specialists state that MNCs make sure that there is substance of their global tax-planning technique when it comes to carrying out operations across countries or investment transactions, as a way to no longer fall foul of anti-avoidance provisions. However, as mentioned by means of IdealNews in its edition dated December 8, the CBDT is taking a better take a look at the ‘tax-planning’ mechanisms followed by means of India Inc, which is on an outbound enlargement spree.
For example, aggressive tax-planning that leads to parking of passive finances, similar to royalty bills to related events in favourable jurisdictions, or supply chain modalities that lack substance wherein most effective marketing operations are performed in upper tax countries (similar to India) are some issues in the harsh spotlight of the taxman.
The not too long ago released draft document by means of a CBDT committee that discarded the typical switch pricing approach for attribution of income of a foreign enterprise having a permanent established order in India is also a step in opposition to curtailing benefit moving, said a central authority professional. The committee has beneficial a formula-based approach by means of applying the global operational benefit margin to the income from India, with adjustment for various elements similar to manpower and belongings.
TJN, an independent analysis based global community, estimates that $500 billion is dodged each yr in tax by means of multinationals by means of use of a community of favourable tax countries. The index covers 64 countries, which are ranked in response to a ‘company tax haven’ rating. Some of the preferred countries, through which FDI is routed into India, featured a few of the best 25 countries in this index.
Other countries included in the index were Singapore (rank 8), UAE (12), Mauritius (14) and Cyprus (18). According to TJN, 52% of the world’s company tax avoidance risks may also be attributed to the top 10 countries in the index (see graphic).
Based at the ‘company tax haven’ rating, the index displays how aggressively countries (tax havens) use low or nil company taxes, loopholes, secrecy, lax anti-abuse provisions and aggressive tax treaties (which provide benefits to stakeholders). Through these, they attract MNCs and allow them to flee or undermine tax laws in different countries.
It has a ripple effect as different countries, to claw back foreign investments, lodge to tax competitiveness. The index additionally elements in a global scale weight, which measures the presence of a rustic in cross-border transactions.
Tax specialists state that MNCs make sure that there is substance of their global tax-planning technique when it comes to carrying out operations across countries or investment transactions, as a way to no longer fall foul of anti-avoidance provisions. However, as mentioned by means of IdealNews in its edition dated December 8, the CBDT is taking a better take a look at the ‘tax-planning’ mechanisms followed by means of India Inc, which is on an outbound enlargement spree.
For example, aggressive tax-planning that leads to parking of passive finances, similar to royalty bills to related events in favourable jurisdictions, or supply chain modalities that lack substance wherein most effective marketing operations are performed in upper tax countries (similar to India) are some issues in the harsh spotlight of the taxman.
The not too long ago released draft document by means of a CBDT committee that discarded the typical switch pricing approach for attribution of income of a foreign enterprise having a permanent established order in India is also a step in opposition to curtailing benefit moving, said a central authority professional. The committee has beneficial a formula-based approach by means of applying the global operational benefit margin to the income from India, with adjustment for various elements similar to manpower and belongings.
Top India FDI sources on tax haven list
![Top India FDI sources on tax haven list]()
Reviewed by Kailash
on
May 30, 2019
Rating:
