According to Neil Williams, of business crime solicitors Rahman Ravelli, the study is sure to fuel the growing dissatisfaction with corporations that go to any lengths to pay minimal tax.
Britain's offshore territories the British Virgin Islands (BVI), Bermuda and the Cayman Islands have been named as the most significant jurisdictions used by global companies to minimise their tax bills.
The Tax Justice Network, a group campaigning for transparency, said a study it conducted identified the territories as the most favoured locations for those looking to reduce their tax burden. According to the Network, its study measured multinational activity in each country in 2017 and assessed the tax rates and loopholes available to those looking to cut their tax bills.
While tax evasion is illegal, companies are not forbidden from reducing their bills by taking advantage of loopholes. They are allowed to move profits through countries or territories that impose lower taxes or offer greater scope for companies to not pay tax.
But while taking advantage of the opportunities offered by certain countries, the report from the Tax Justice Network comes at a time when the authorities are looking for ways of recouping more tax from multinationals; particularly those who have been seeking to move profits between countries to lower their tax burden.
The most high-profile example was Apple being ordered to pay billion euros to Ireland – a figure that the European Union's anti-trust regulators said the company owed the country in back taxes. The European Commission ordered Ireland to recover the money from Apple three years ago, arguing that the company had benefited from an illegal tax deal that gave it an unfair advantage, in breach of European state aid rules.
While tax reduction is big business for companies and governments alike, there is a growing distaste for corporations that use their might to avoid paying what the general population deem right and fair. The findings of the study are only likely to increase the strength of this feeling.
If such opinion leads to a tightening of the screws on regulation in the future, there may be increasingly less loopholes available for companies to toy with.
You can read more about HMRC - Tax and VAT Investigations at our website here: https://www.rahmanravelli.co.uk/expertise/hmrc-tax-and-vat-investigations/.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
