By Ludvig Wier, University of Copenhagen Gabriel Zucman University of California Berkeley
About a decade ago, the world’s biggest economies agreed to crack down on multinational corporations’ abusive use of tax havens. The 15-point plan was designed to stop corporate profits being shielded from tax authorities.
But, according to our estimates, it hasn’t worked. Instead of reining in the use of tax havens – countries such as the Bahamas and Cayman Islands with very low or no effective tax rates – the problem has only gotten worse.
Our calculations show that corporations transferred nearly US$1 trillion of profits from their home countries to tax havens, up from $616 billion in 2015. This was the year before the global tax-haven plan was implemented in the G-20, a group of 20 major economies.
We measured the profits in tax havens that were not explained by normal economic activity, such as workers, factories, and research in the country. This was a new study. Our findings – which you can explore in more detail along with the data and an interactive map in our public database – show a striking pattern of…
