Various jurisdictions may have been accused of sustaining tax evasion tactics by multinational companies but a new report reveals that the US is acting even worse.
The Cayman Islands are widely considered to be a so-called tax haven, for multinational companies who wish to save income from taxation. The Financial Secrecy Index, which is a name-and-shame list of countries compiled biennially by a UK-based advocacy group revealing that the US has overtaken countries such as the Cayman Islands and Singapore in regards to financial secrecy.
The Financial Secrecy Index ranks countries on “their secrecy and the scale of their offshore financial activities.” Switzerland is the number one on the list, with Hong Kong following closely behind in second place. The US, surprisingly, holds 3rd place.
Interestingly The UK, which is ranked 15th, would come out on top if the report had treated the UK and its dependent territories as a single unit.
While some progress is noted compared to previous year, related on the OECD’s actions regarding the exchange of financial information between governments, the report warns that certain countries are blocking and sabotaging these efforts. Among those countries appear the US, which is of “greatest concern” one of the few jurisdictions whose secrecy score worsened after 2013.
According to the TJN report, “the US has not seriously addressed its own role in attracting illicit financial flows and supporting tax evasion” .
Despite the fact that the Obama administration has made some efforts to tighten rules on offshore tax loopholes, it was the government’s refusal to participate in the OECD’s global reporting standard for bank data that has landed it so high on the list.