Tax Havens Flashcards
Starbucks
Between 2009 and 2012 they reported no profit and paid no income tax on £1.2 billion of sales in the UK.
Amazon
£4.2 million tax paid
£4.3bn in sales
£4327 tax paid in 2014
Tax Havens
Moving profits to countries with no or little tax. (Switzerland)
How do Tax Havens affect sovereignty?
There are loopholes in legal frameworks that allow businesses to break the law.
Luxembourg
1% Corporation Tax
Jersey
0% Corporation Tax
The Cayman Islands
0% Corporation Tax
Link between Globalisation and Tax Havens
Tax Havens facilitate and exacerbate the uneven distribution of wealth and capital between the upper and working class.
Genie Coefficient
Why do people use tax havens?
Fear of losing money
How much money is located in tax havens?
Between 5 and 7 trillion dollars are located in tax havens.
Tax Justice Network
Estimated that losses to higher taxing countries are up to $255 billion yearly.
Trade Liberalisation
Economic efficiency can only be achieved if regulations are removed.
Deregulation
Removing the role of government in the economy allowing the free movement of capital
Corporate Migration
The moving of TNCs from high tax state to low tax states.
Why don’t all businesses use tax havens?
-Ethical Reasons
-CSR
-Security from the government
Kleptocracy
A society or system ruled by people who use their power to steal their country’s resources.
Kleptocratic Leaders
Secretly transfer public funds into tax havens, treating their countries public money as a source of personal wealth.
