“Panama Papers”: the world of tax havens in five questions

THE ECO SCAN – Tax havens are veritable haunts of “shadow finance”. As decried as they are protected, they crystallize the excesses of the banking system.

• What is a tax haven?

No legal definition. There is no legal definition of a tax haven. , the OECD retains four major criteria to identify such a territory: a zero or insignificant tax rate, a lack of cooperation in the exchange of information with other countries, a lack of legislative, legal or administrative transparency and and finally very limited non-financial activities.

Varied activities. Based on these criteria, Esther Jeffers and Dominique Plihon, respectively lecturer at Paris 8 and professor at Paris 13, have estimated the number of tax havens in the world at more than one hundred. “They have different activities, they explain in a document entitled The shadow banking system and the financial crisis . Some attract multinationals with an unbeatable corporate tax rate. Others are regulatory havens, where the creation of opaque holding companies is easy. There are also banking havens, where banking secrecy allows individuals and businesses to escape tax controls in their country of origin.

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Offshore (adj. inv.): refers to the banking sector established abroad and not subject to national legislation

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A tax haven offers a whole range of financial services offshore. This means that it grants banking facilities to non-resident persons, who can access them from a third country. Activities offshore are not necessarily illegal. For example, in France, having a bank account offshore, that is to say abroad, is perfectly legal. It simply needs to. On the other hand, having an account offshore for .

A strong collusion between politics and finance. Another marker, and not the least important, of tax havens is the collusion between financial interests and political power. As reminded by Guardian very often, political opposition to the system offshore does not exist or no longer exists. This often leads to a two-speed tax system: a zero or anecdotal rate for non-residents and a much higher rate for residents, who then constitute the main or even the only source of income for the country.

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• Where are the tax havens?

According to , 30 jurisdictions are still considered tax havens. To compile this “top 30”, the European institution compared the reports submitted by each member country on the countries it considers to be the most deviant in this area, to compile the thirty least virtuous, which appear on the map below. -above. The majority of secrecy jurisdictions are located in the Caribbean and West Indies. Oceania and Europe also have several tax havens. Guatemala and Botswana only appear on France’s list, not having been retained on the European harmonized list.

For its part, the Global Forum on Transparency and Exchange of Tax Information – under the aegis of the OECD – has 127 members, classified according to their degree of financial cooperation. Each member country completes a questionnaire on the transparency shown by the other member countries, with all the answers constituting a sort of audit. , eleven States did not pass the first phase (Brunei, Dominica, Federated States of Micronesia, Guatemala, Kazakhstan, Lebanon, Liberia, Nauru, Panama, Trinidad and Tobago as well as Vanuatu) and three were considered non-cooperative at the end of the second phase (Cyprus, Luxembourg and Seychelles).

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• On what criteria are these lists drawn up?

The European Commission’s list was compiled from the lists of fifteen countries (Germany, Belgium, Bulgaria, Croatia, Spain, Estonia, Finland, France, Greece, Italy , Latvia, Lithuania, Poland, Portugal and Slovenia). Each country has its own criteria, including cooperation in financial matters, the absence of a significant tax rate or other miscellaneous criteria.

The Global Forum on Transparency retains a series of specific criteria, but only in the area of ​​financial cooperation. The tax rate, for example, is not taken into account. Ten different criteria are used to determine whether a country is cooperative or not, in three distinct categories: the availability of bank information, its ease of access and the possibility of exchanging it ().

• Why are tax havens a problem?

First of all, the opacity in force in these jurisdictions very often conceals the financing of criminal activities, ranging from the laundering of dirty money to drug trafficking, and even terrorism.

Tax havens also represent a significant shortfall for other States. They are not of interest only to wealthy taxpayers anxious to evade taxes. They also drain – and above all – many hedge funds and large companies, which find in them a means of reducing their tax burden in their country of origin, and now. When we know that nearly 50% of international capital flows, according to the IMF, pass through a tax haven, we can better imagine the extent of this tax evasion.

• Where are we in the fight against tax havens?

The OECD coordinates worldwide policies to fight tax evasion and the financing of criminal activities. The Global Forum on Transparency and Exchange of Tax Information thus holds seminars several times a year in countries wishing to strengthen the fight against tax opacity; the last ones were organized in Bogota (Colombia) and Yaoundé (Cameroon). At the same time, the Forum continues its work of evaluating the transparency of its member countries, supporting them in their efforts to strengthen banking and tax cooperation.

Lists of tax havens, documents submitted to lobbies

Nevertheless, the very notion of a tax haven remains subject to powerful lobbies. And the countries which appear on one or the other of the “black lists” of the Commission or the OECD seek at all costs to leave it. When the Commission’s list was released, some countries were surprised to be mentioned in it, even though they had undertaken to exchange data on foreign taxpayers… as required by the OECD. Other notorious tax havens do not appear or no longer appear, like Jersey and Bermuda, already. Ireland, on the other hand, withdrew under pressure from its neighbours. The City of London, which Esther Jeffers and Dominique Pilhon designate as “the biggest tax haven” since it alone would house 55% of deposits offshore, was never worried. A small corner of paradise protected by a powerful umbrella of lobbies.


Le Figaro invites you to discover , published on September 9, 2015. Crisis of subprimerigging of Greek accounts, insider trading, whistleblowers, tax havens… Find all our content in our .

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