The UAE has emerged as one the fastest-growing corporate tax haven in the world as more than $200 billion flowed into the Gulf state last year.
According to the Corporate Tax Haven Index 2021 published by the Tax Justice Network, a London-based advocacy group consisting of a coalition of researchers and activists with a shared concern about tax avoidance, tax competition, and tax havens, the UAE is now the 10th most attractive tax haven for foreign nationals and international corporations in the world.
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The 2021 Corporate Tax Haven Index highlights that around $218 billion were rerouted to the UAE last year to save taxes, resulting in an increase in the financial activity by over 180%.
The UAE was adversely impacted by the Coronavirus pandemic last year as lockdown hurt the tourism industry while state revenues plummeted due to low oil prices.
In an attempt to boost the economy, the UAE government introduced attractive visa offers and relaxed rules to encourage rich foreign nationals and international companies to establish a local foothold.
The Financial Action Task Force (FATF) had criticized the move, forcing the UAE to institute a new government office to tackle money laundering and terrorist financing.
Besides, four of the UK’s Overseas Territories have made it to the top 10 tax havens list as well. The British Virgin Islands, Cayman Islands, and Bermuda have been ranked as the top 3 tax havens in the world while Jersey has been placed at 8th position.
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Here is a complete list of the top 10 tax havens according to the Corporate Tax Haven Index 2021.
Alex Cobham, Chief Executive Tax Justice Network, has said that governments around the world lose over $427 billion in tax every year to global tax abuse. Of the $427 billion in tax lost each year, more than half, $245 billion, is directly lost to cross-border corporate tax abuse by multinational corporations.
He added that these tax losses are particularly damaging to lower-income countries, which lose the equivalent of half of their combined public health budgets every year to global tax abuse.