The Financial Secrecy Index: Shedding New Light on the Geography of Secrecy

Cobham, Alex; Jánský, Petr; Meinzer, Markus

doi:10.2139/ssrn.2623152

Cited by 44 publications

(76 citation statements)

References 52 publications

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“…Instead, we base our definition on the Tax Justice Network's Financial Secrecy Index (FSI) which replaces the binary division of tax havens versus all others, with the notion of a secrecy spectrum on which all jurisdictions sit (see Cobham, Janský, & Meinzer, 2015). On the basis of 49 objectively verifiable variables, largely drawn from the work of international organisations, 15 secrecy indicators are constructed.…”

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confidence: 99%

Tax Haven Networks and the Role of the Big 4 Accountancy Firms

Jones

Temouri

Cobham

2016

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A B S T R A C TThis paper investigates the association between the Big 4 accountancy firms and the extent to which multinational enterprises build, manage and maintain their networks of tax haven subsidiaries. We extend internalisation theory and derive a number of hypotheses that are tested using count models on firm-level data. Our key findings demonstrate that there is a strong correlation and causal link between the size of an MNE's tax haven network and their use of the Big 4. We therefore argue that public policy related to the role of auditors can have a significant impact on the tax avoidance behaviour of MNEs.

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confidence: 99%

Tax Haven Networks and the Role of the Big 4 Accountancy Firms

Jones

Temouri

Cobham

2016

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“…In assessing the impact of the G20 policy crackdown on tax havens and OECD (), Johannesen and Zucman () find that tax evaders tend to shift deposits to havens not covered by a treaty. Cobham, Janský, and Meinzer () evaluate the financial secrecy of many countries and operationalize a spectrum capable of accommodating all countries.…”

Section: Literature Reviewmentioning

confidence: 99%

International tax planning within the structure of corporate entities owned by the shareholder‐individuals through Panama Papers destinations

Nerudová

Solilová

Litzman

et al. 2019

Development Policy Review

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Motivation The Panama Papers scandal highlighted the scale of financial secrecy, anonymous ownership and shell companies and their role in profit shifting and tax avoidance. We show the importance of international tax planning within the structure of corporate entities owned by shareholder‐individuals through Panama Papers destinations. Purpose To identify profit‐shifting channels and to estimate related government revenue losses to European Union Member States. Methods Using company data from the Amadeus/Orbis database (Bureau Van Dijk, n.d.a, n.d.b), we applied micro‐data analysis to the financial statements of multinational companies (MNEs) owned by shareholder‐individuals. Two groups—one with and the other without links to Panama Papers tax havens—alongside an analysis of profit‐shifting indicators. Findings Profit is generally shifted by moving operating revenues or costs, though the use of debt channels is also important. Also, groups linked to tax havens pay significantly less tax per unit of profit before tax, and require less operating revenue to achieve higher profits. Finally, related government revenue losses were assessed at EUR 8.67 billion. Policy implication Our results are relevant to the European Commission’s Comprehensive Common Consolidated Corporate Tax Base (CCCCTB) as it aims to counter profit shifting out of the European Union (EU) into tax havens. Further, our research highlights the importance of setting up registries of ultimate beneficiary owners in EU Member States.

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“…Secrecy through opaque financial structures played a key role in the corporate scandals of Enron, Olympus and Parmalat as well as in the near-collapse of the large hedge fund LTCM, which all had significant subsidiaries in Cayman. According to the Tax Justice Network, the Cayman Islands is number five in the 2015 Financial Secrecy Index, which combines a secrecy score with a global scale weight in financial services exports (TJN 2015a;Cobham et al 2015). Cayman's relatively high secrecy score of 65, however, is lower than those of other major OFCs, such as Switzerland (73) or Singapore (69), reflecting regulatory improvements in recent years (TJN 2015b).…”

Section: Research About the Cayman Offshore Financial Centermentioning

confidence: 99%