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No errors in Bermuda’s ranking as world’s worst tax haven – Oxfam responds to claims by UK overseas territory
Oxfam dismissed claims by the government of Bermuda that there are serial errors in the agency's report on the world’s worst tax havens today.
The UK overseas territory earned the top spot in Oxfam's list of corporate tax havens because of its corporate income tax rate of zero percent and its lack of enthusiasm for international cooperation against tax avoidance. In 2012, US multinational corporations reported more profits in Bermuda than in Japan, China, Germany and France combined.
Esme Berkhout, tax policy advisor for Oxfam said:
“Bermuda’s claim that Oxfam’s research on the world’s worst tax havens is full of errors just doesn’t stack up. We appreciate the steps that have been taken by Bermuda, but it needs to do an awful lot more if it is to prevent the island being used by big business and wealthy individuals to dodge taxes.
“Bermuda needs to change the way it operates if it wants its name off the world’s worst tax havens list. We call on Bermuda and all governments to support a new generation of international tax reforms aimed at putting a halt to the race to the bottom in corporate tax.”
Download a copy of Oxfam’s report, Tax Battles.
Detailed responses to Bermuda’s statement are outlined below. Bermuda’s full statement can be found here.
The Bermuda government claims that Oxfam’s ranking is based ‘wholly on volume of assets.’ In fact, Oxfam’s ranking is based on a comprehensive set of criteria including tax rates, tax incentives, cooperation with multilateral anti-abuse, and exchange and transparency initiatives, as well as evidence of large-scale profit shifting.
Bermuda says that setting corporate tax rates is a sovereign right. Many countries argue that corporate tax rates are a matter of national sovereignty however countries are not freely deciding tax policies. Governments are under huge pressure from corporations to provide ever more generous corporate tax incentives and reduce corporate tax rates. In addition, corporate tax havens are increasing the pressure on other countries to join a race to the bottom on corporate tax in order to attract investment – with little or no public debate. To get their sovereignty back, countries need to cooperate and coordinate on tax to a far greater extent than they are doing at the moment.
Bermuda claims it is cooperating with international processes. Oxfam’s scoring and ranking acknowledges Bermuda is largely compliant with the ‘Global Forum on Transparency and Exchange of Information for Tax Purposes:’ that the island has implemented the MCMAA Convention on Mutual Administrative Assistance in Tax Matters; and that Bermuda has signed up to the OECD country-by-country reporting standards. However Bermuda has not signed up to the complete set of OECD Base Erosion and Profit Shifting (BEPS) standards.
Oxfam notes Bermuda’s efforts against money-laundering and all criminal activities. While this is important it does not change Bermuda’s role as corporate tax haven.
Anna Ratcliff: email@example.com and 07796993288
For updates, please follow @Oxfam.