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Why are there problems in the UK’s ‘Treasure Island’ network of tax havens? Crime News

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The exotic network of tax havens in the UK’s “Treasure Island” could be the biggest threat in half a century after the United States and its allies pledged to abolish more taxes on large, profitable multinational corporations.

In many of the traditional islands of the British Empire, remote jurisdiction has been the main jurisdiction for everyone, from wealthy Chinese officials to the Russian oligarchy to Western companies to cover funds seeking lower taxes or secrecy.

Seven groups (G7) of finance ministers reached a tax deal in the 19th century. In a large 16th-century mansion near Buckingham Palace. It is likely that the UK’s treasure islands will be hit hard after decades of attempts by large economies to push back revenue.

“It’s an inflexible moment,” said Alex Cobham, chief executive of the Tax Justice Network, a defense group campaigning against tax evasion. “We’ll look back in five or 10 years and say, ‘Yeah, then that changed.’

“There’s a narrative change: this active commitment to finish the race by the end,” Cobham said, although he acknowledged that the exact details may still be misspelled and that politicians will be promising for years to come.

The Tax Justice Network estimates that the world loses $ 427 billion a year as a result of tax corporations and individuals fleeing. They lose about $ 245 billion to multinationals that direct profits to tax havens and another $ 182 billion to wealthy people who take away assets.

If the details of the G7 commitment become an enforceable reality, the global flow of hidden profits could be channeled into one of the most fundamental ways of the twentieth century. Since the collapse of the British Empire in the twentieth century.

When British power fell, some of its property did not belong to the United Kingdom but was subject to British defense agreements and became an autonomous territory that maintained strong ties with London.

Some of these 14 overseas territories – including Bermuda, the British Virgin Islands (BVI), the Cayman Islands, Gibraltar and the Turks and Caicos Islands – began to live off a mix of beach tourism and exotic finance, with activists saying locals and locals alike. taxpayers changed short.

Competition networks

Britain’s tax havens are responsible for 29 per cent of the $ 245 billion tax the world loses on corporations, according to the Tax Justice Network, with BVI, Cayman Islands and Bermuda as the top three drivers of corporate tax abuse on the planet.

The finance ministries of BVI, Cayman Islands and Bermuda did not immediately respond to requests for comment.

Cobham said the reorientation of corporate profits has led to an estimate that the most affected British islands have been in business for decades and have been undermining the business model that could lead to high unemployment.

Essentially, two competing and interconnected tax havens were created: a British network and a more continental European flavor, encompassing Ireland, Cyprus, Luxembourg, Malta, the Netherlands and Switzerland.

The G7 tax deal will make corporate tax havens much more attractive, as it gives countries the right to increase corporate income tax in countries with the lowest global tax rates.

“Those who have traditionally served the personal market – if that’s what you want is the palm market – will leave,” said Richard Murphy, an accountant and visiting professor of accounting at the University of Sheffield. School.

“They’re big corporate locations like Luxembourg, like Ireland, like the Netherlands, that will be successful here,” he said.

The hardest hit countries will be hard pressed to keep their tax advantages as long as possible. Murphy said key accounting definitions such as “profit” and “tax paid” have yet to be determined.

Although Murphy saw less influence in many of Britain’s traditional tax havens, he said he eventually sent a signal to the corporate world that the most significant aspect of the G7 communiqué was: “clean up your action”.

That would be a special concern, he said, as many Western committees face pressure from shareholders who are pushing for better environmental, social and corporate governance.

“For the business community, it’s sending a very broad message that‘ these places are far away – you may have problems ’and some of them will have problems,” he said.

“Technology will obviously succeed, but so will financial services in a big way,” Murphy said. “Banks and finance are on the firing line for that, as are some pharmaceutical companies.”



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