Conduit and sink OFCs
[5][6] The results were published by the University of Amsterdam's CORPNET Group in 2017, and identified two classifications:[5][6] Our findings debunk the myth of tax havens[c] as exotic far-flung islands that are difficult, if not impossible, to regulate.
Many offshore financial centers[c] are highly developed countries with strong regulatory environments.In 2017, the European Parliament adopted the CORPNET approach into their frameworks for addressing tax havens.
The lack of an accepted definition for identifying tax havens (and even offshore financial centres), results in different lists, including: There are "traditional" tax havens common on all these lists (e.g. some Caribbean and Channel Islands locations), which some global regulators have either blacklisted, or have issued formal warnings/threat of sanctions against, unless transparency is increased.
[24][25] However, a key difference between the lists regards the major OECD and EU tax havens (or offshore financial centres), such as Switzerland, Ireland the Netherlands and Luxembourg (amongst others).
[34][35][1][3] The report was the result of a multi-year investigation by political economists and computer scientists in the CORPNET research group at the University of Amsterdam.
[39] At its crudest level, the Offshore-Intensity Ratio explains why the countries at the top of global GDP per capita lists are mostly tax havens.
[47][48] Conduit OFCs are shown to be dominated by major law firms and global accounting firms, who create the lawfully constructed special purpose vehicles (SPVs) and BEPS tools that make the connections with the sink OFCs, by exploiting legislative loopholes such as the Double Irish and Dutch Sandwich.
[61][62] The CORPNET Report highlighted some interesting aspects of the 24 Sink OFCs:[4] Of the wider tax environment, O'Rourke thinks the OECD base–erosion and profit–shifting (BEPS) process is "very good" for Ireland.
Apple used the CAIA (or Green Jersey) BEPS tool in Q1 2015, resulting in the "leprechaun economics" restatement of Irish GDP by 34.4 percent.
[74][75] However, CORPNET researchers from the University of Amsterdam directly replied to Howard Quayle's article[76] clarifying that while the IOM does not appear as a leading sink OFC for corporate tax avoidance, it does not mean that individuals (personal bank accounts and trusts) do not use the IOM to avoid taxes, and particularly United Kingdom VAT.
Other commentators have added that the IOM is "failing as a tax haven", and is now too small to appear in major studies like the CORPNET research.
[77] The CORPNET report used legal corporate connections on the Orbis database, rather than the actual "quantum" of money, as its primary metric of analysis.
