Tax Justice Network ranked countries for financial opacity and closeness
2020/02/20
Роман Денисов
Налоговая практика
Tax Justice Network ranked countries for financial opacity and closeness

The non-governmental organisation, Tax Justice Network ranked countries for financial opacity and closeness, writes the Kommersant newspaper. In the top 10 were not only offshore companies such as the British Virgin and Cayman Islands, but also countries such as the United States, Japan, Switzerland, the Netherlands and the UAE.

IMF methodology, introduced in 2007, is used to assess transparency.

For calculations, IMF statistics on the balance of payments in terms of financial service exports and other IMF data on cross-border financial activity are taken. This is to determine the amount of financial activity committed in each country under review by non-residents of that country. In addition, an analysis of “unique legal loopholes” that can be used to ensure financial closure has been added to the 2020 rating methodology. This led to the fact that countries that, in recent years, did not bring their legislation into line with international transparency requirements could be rated lower than countries that have introduced the corresponding changes.

Closed jurisdictions with preferential taxation will exist as long as it benefits the state itself. At the same time, using offshore companies is becoming increasingly difficult – both due to the risks of revealing bank secrets and due to USA’s sanctions policy. Also, offshore jurisdictions are facing ever more disclosure requirements.

A case in point is the United Kingdom, and its demands for proof of income. In turn, in 2020, the Netherlands plans to create a partially open register of all beneficiaries of every company. Also, anti-offshore norms are often adopted and extended to include prior periods.

Under these conditions, restructuring revenues without transferring them to offshore jurisdictions may become a much more convenient and profitable option.



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