Multinationals Dodge $200 Billion Per Year
GENEVA – Foreign investment is being routed via financial hubs and tax havens almost exclusively for the purposes of evading taxes.
In a recently released report the United Nations Conference on Trade and Development has claimed that multinational businesses around the world avoid approximately USD 200 billion per year.
The taxes are being avoided by routing foreign investment through financial hubs and tax havens.
It was noted that in some cases there are genuine reasons for foreign investment to be sent via a third country, but, according to the information in the report, in most cases the actual reasons was solely to minimize tax obligations.
It is estimated that investment via such intermediary countries accounts for 18 percent of all foreign investment coming into countries in Northern America, 35 percent of investment into Europe, and as high as 60 percent of the investment into transition economies.
The effect of tax avoidance behavior was calculated by investigating the interaction between changing revenues and the proportion of incoming foreign investment that was routed via financial hubs and tax havens.
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