More than $4 billion in Australian tax is being shifted by Australian-based multinationals into the world's 15 worst corporate "tax havens" each year, Oxfam says.
Its report, Tax Battles: the dangerous race to the bottom on corporate tax, to to be released on Monday, defines a "tax haven" as a low-tax or no-tax nation with generous tax incentives.
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While simply having low tax rates is not illegal, and countries can legally provide incentives to attract business, the report criticises the OECD for not including certain countries in its list of tax havens.
Oxfam's analysis found that 90 percent of the world's biggest companies had a presence in at least one tax haven.
![Bermuda is the world's top tax haven according to Oxfam.](/web/20161212013306im_/http://www.smh.com.au/content/dam/images/g/h/a/x/y/d/image.related.articleLeadwide.620x349.gt6v3n.png/1481485542605.jpg)
The report, based on 2014 data, exposes 15 jurisdictions as the "worst tax havens" used globally by multinationals to avoid paying tax in the countries where they operate.
They include Bermuda, the Cayman Islands, the Netherlands, Switzerland, Singapore, Ireland, Luxembourg, CuraƧao, Hong Kong, Cyprus, Bahamas, Jersey, Barbados, Mauritius and the British Virgin Islands.
Oxfam's list is based on "the extent to which these countries use damaging tax policies to help corporates reduce their tax bills, including using low or zero company tax rates, unfair and unproductive tax incentives, and showing a lack of cooperation with processes fighting tax avoidance", it says.
In June Oxfam said the use of tax havens by Australian-based multinationals cost Australia $6 billion in lost tax revenue annually, and developing countries an estimated $US2.3 billion ($2.8 billion) every year.
![Children in developing nations miss out due to corporate tax dodging, Oxfam says.](/web/20161212013306im_/http://www.smh.com.au/content/dam/images/g/t/2/2/g/v/image.related.articleLeadwide.620x349.gt6v3n.png/1481485542605.jpg)
āThe report was launched with an online poll that showed that 90 per cent of Australians polled think the Government should do more to stop multinational corporations avoiding paying tax in Australia and in every country in which they operate.
Governments needĀ to do more
The G20 and the OECD have tried to tackle corporate tax avoidance as part of the Base Erosion and Profit Shifting (BEPS) plan.
The initiative is aimed at enabling governments to tax profits where those profits have been made, rather than the offshore tax havens they get shifted to for tax avoidance purposes.
NGOs like Oxfam have been critical of OECD governmentsĀ for not providing "an equal platform for developing countries to influence the BEPS tax reform negotiations".
Both the European Union and the G20 have also committed to producing a blacklist of tax havens in order to clamp down on corporate tax dodging.Ā A G20 blacklist isĀ due to be published next year.
According to the United Nations Conference on Trade and Development (UNCTAD), large multinationals own, on average, almost 70 affiliates each in tax havens, and this enables them to pay aĀ lower effective corporate tax rate at the group level compared to multinationals without affiliates in tax havens.
But OXFAM says there's beenĀ "a failure to use objective and comprehensive criteria for assessing countries means many tax havens".
"Criteria for the EU blacklist, may not, for example, include whether a country has a zero per cent corporate tax rate," the report says.
"This means countries such as Bermuda, the world's worst corporate tax haven according to Oxfam's analysis, may not feature on the list at all."
Oxfam found that US multinational companies reported $US80billionĀ in profits in Bermuda in 2012 ā more than their profits reported in Japan, China, Germany and France combined.
"The EU's decision to only assess and list countries outside of the EU ensures that no European country will feature on their blacklist, despite Oxfam's analysis indicating that the Netherlands, Luxembourg, Ireland and Cyprus are among the world's worst corporate tax havens," the report said.
"It is absolutely critical that the world establishes a clear list of which are the worst tax havens, based on objective criteria, and free from political interference."
Oxfam Australia's senior economist MuheedĀ Jamaldeen said Australian-based companies needed to be crystal clear about what taxes they were paying and where.
The report calls on governments to improve public tax transparency by publishing country-by-country reports that give detailed breakdowns of profits earned, taxes owed and taxes paid, as well as an overview of their economic activity in every country where they have subsidiaries.
Oxfam also wants tax agencies to publishĀ "core elements" of tax rulings and agreements between tax authorities and multinational companies,Ā "to make both governments and companies accountable to citizens".
The OECD had rejected making such information publicly available, saying it would be "misleading".
Oxfam's ranking of the top 15 corporate tax havens:
1 Bermuda
2 Cayman Islands
3 Netherlands
4 Switzerland
5 Singapore
6 Ireland
7 Luxembourg
8 CuraƧao
9 Hong Kong
10 Cyprus
11 Bahamas
12 Jersey
13 Barbados
14 Mauritius
15 British Virgin Islands
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