Latest news with #CorporateTaxHavenIndex
Yahoo
22-05-2025
- Business
- Yahoo
World's Largest Meat Producer Gains Access to U.S. Capital Markets While Avoiding Millions in Taxes
New report by World Animal Protection exposes how JBS, the major supplier to brands including KFC, McDonald's, and Walmart, has created a web of offshore companies to avoid paying corporate taxes to the U.S. and other jurisdictions Last week, the SEC greenlit JBS' request to list on the New York Stock Exchange using one of these offshore companies, located in a known tax haven, as its holding company NEW YORK, May 22, 2025 /PRNewswire/ -- New research conducted exclusively on behalf of World Animal Protection, as well as a separate report by the Netherlands based Centre for Research on Multinational Corporations (SOMO), reveals a calculated, aggressive and unethical tax avoidance scheme by Brazilian meat giant, JBS (B3 S.A.: JBS SA). According to the SOMO report, between 2019-2022, JBS is estimated to have avoided paying between $221 and $442 million in corporate taxes to the U.S., Canada, Mexico, and other countries. The tax avoidance scheme involves a web of subsidiary companies registered in low-tax or no-tax jurisdictions like Luxembourg and Malta. While JBS goes to inordinate lengths to pay as little tax as possible to the U.S. and other countries in which it operates, shifting greater financial burden onto the very consumers it is profiting from, the company also recently gained access to U.S. equity markets and investors. On April 23, the U.S. Securities and Exchange Commission (SEC) approved JBS' request to move its primary stock exchange listing from Brazil's main B3 stock exchange to the New York Stock Exchange (NYSE). As part of the listing proposal, JBS has created a new holding company, JBS N.V., which will be the entity listed on the NYSE. The entity is registered in the Netherlands, ranked 7th in the Tax Justice Network's Corporate Tax Haven Index. The World Animal Protection and SOMO report looked at JBS' Luxembourg-based subsidiary companies, which own many of JBS' most profitable operations in key markets like the U.S., Australia, Canada, Europe, and Mexico. As of 2022, only one of JBS' 17 Luxembourg-based subsidiary companies reported having any employees, while the other 16 companies reported having none. The creation of artificial structures including intercompany loans and intercompany dividends allows taxable profit to be shifted from the U.S. and other areas of operation to Luxembourg and other tax haven jurisdictions, where those profits are taxed at very low rates (if at all). During the period 2019-2022 researched in the reports by World Animal Protection and SOMO, these Luxembourg-based subsidiary companies recorded approximately $2.8 billion in pre-tax profits, largely consisting of the intercompany dividends and interest payments owed by the profitable operations in other countries. Because of the favorable tax treatment of this kind of income within Luxembourg's tax regime, these same companies only paid net corporate income tax of $0.5 million for that same 2019-2022 period. Meanwhile, almost $11 billion in intercompany dividends flowed through JBS' group of Luxembourg subsidiary companies during this period. At the end of 2022, JBS' Luxembourg-based subsidiary companies had intercompany loan balances in excess of $21.7 billion. As the world's largest meat producer, JBS owns brands including Pilgrim's Pride, Just Bare and Swift, which are widely sold at U.S. grocery stores like Walmart, Safeway, H.E.B., Weis, Kroger, Albertson's, Giant, and on Amazon. Currently, JBS slaughters a staggering 8 million lambs, 27 million cows, 53 million pigs and 5 billion chickens per year. The company is infamous for its inhumane and sometimes illegal factory farming and deforestation practices, which led to a 50% increase in JBS' emissions in recent years. The tax avoidance scheme should be especially concerning to American consumers, as the U.S. market accounts for over half of JBS' revenue. The SEC approval for JBS to list on the NYSE came despite World Animal Protection and dozens of other organizations delayed the SEC's decision for nearly two years by exposing material gaps in the information the company provided to investors and forcing JBS to continually disclose the risks in its supply chain, including deforestation in biodiversity hotspots, animal suffering, and zoonotic disease. In the U.S., in the past year alone, JBS has been fined $8 million for child labor violations related to relying on migrant children to do dangerous work in their slaughterhouses, $100 million for conspiring with rivals to underpay American chicken farmers, and $83 million for conspiring with rivals to curb beef supply in the U.S. in order to artificially inflate prices. In 2020 the holding company of JBS' controlling shareholder Batista family was fined $256 million by the SEC in relation to a conspiracy to violate the anti-bribery provisions of the Foreign Corrupt Practices Act. Tim Vasudeva, Head of Private and Public Sector Finance at World Animal Protection, said: "Instead of contributing its fair and reasonable share of tax to the countries where it is most profitable, multinationals like JBS use expensive lawyers and consultants to take advantage of tax loopholes and pass the buck to the everyday taxpayers who make them profitable in the first place. Beyond holding JBS accountable for its blatant tax avoidance, the U.S. government – and American consumers -- also need to understand that JBS is a company that has been continually convicted and fined over many years for exploiting child labor, bribery, antitrust violations and illegal deforestation." Vincent Kiezebrink, Senior Researcher at The Centre for Research on Multinationals (SOMO), said: "JBS is exploiting the global financial system with surgical precision, using complex offshore structures to avoid taxes. It also poses a risk to investors, whom the company has not informed of its tax avoidance practices, and the potential costs should EU or US regulators take action. Allowing JBS access to US capital markets will only strengthen the monopolistic position it's acquired there. It's time for financial institutions to stop looking the other way. Tax authorities should ensure JBS pays its fair share in tax." About World Animal ProtectionWorld Animal Protection is a global organization working to end animal exploitation. We expose cruel systems, promote animal-friendly alternatives, and influence policy change. For 75 years, we've been rewriting the story for animals. Working across almost 50 countries with offices in 12, we prioritize animals in farming and wild animals exploited for use in entertainment, as pets, and in fashion. About SOMO The Centre for Research on Multinational Corporations (SOMO), an Amsterdam-based research organisation, investigates multinationals. Independent, factual, and critical, SOMO has a clear goal—a fair and sustainable world in which public interests outweigh corporate interests. SOMO conducts action-oriented research to expose the impact of multinationals and unprecedented power and reveal the underlying structures underpinning them. View original content to download multimedia: SOURCE World Animal Protection Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
14-05-2025
- Business
- Yahoo
Inside the European centres favoured for cross-border tax planning
Countries are estimated to be losing €416 billion ($492 billion) in tax revenue each year due to profit shifting by multinational corporations and offshore tax arrangements by wealthy individuals, according to the State of Tax Justice 2024 report by the Tax Justice Network. The UK, along with its Overseas Territories and Crown Dependencies, is cited in the report as the largest contributor to global tax revenue losses, accounting for 26% of the total. The report finds that Europe and its associated jurisdictions are collectively linked to over 70% of the risk of corporate tax base erosion globally. So, which European jurisdictions are most frequently used in international tax planning structures? Which countries play a prominent role in enabling such practices? And where do current rules make it easier for corporations to minimise their tax liabilities? The Corporate Tax Haven Index (CTHI) assesses jurisdictions based on how much they contribute to enabling multinational corporations to shift profits and reduce tax payments, using a system of scores and indicators developed by the Tax Justice Network. A jurisdiction's CTHI value reflects the extent of its involvement in facilitating global corporate tax base erosion, as calculated by the index. According to the 2024 report, countries are ranked by the scale and aggressiveness of their tax systems in offering corporate tax avoidance opportunities. The UK's network of Overseas Territories and Crown Dependencies features prominently. The British Virgin Islands, Cayman Islands, and Bermuda occupy the top three positions in the index, each scoring over 2,400 points. Among European jurisdictions, Switzerland holds the highest score outside the UK network (2,279), while the Netherlands (1,945) ranks highest within the European Union. Among Europe's top five economies, the UK (894) has the highest CTHI value, closely followed by France (883). Germany scores 590, with Spain at 557. Italy performs the best with a score of 342—since a lower score indicates better performance in limiting corporate tax avoidance. The CTHI Share is a critical metric that measures the proportion of global corporate tax avoidance risk attributed to each jurisdiction. According to the report, the UK and its network of Overseas Territories and Crown Dependencies are responsible for one-third of global corporate tax avoidance risks, while EU countries account for another third. Breaking it down further, just three British Overseas Territories account for 19.7% of global corporate tax avoidance risks: the British Virgin Islands (7.1%), the Cayman Islands (6.7%), and Bermuda (5.8%). The UK and its networks cost countries over €109 billion in lost tax In comparison, the UK itself accounts for just 2.1% — still the highest share among Europe's top five economies, followed closely by France, also at 2.1%. Germany and Spain have similar shares, at 1.4% and 1.3% respectively, while Italy is responsible for just 0.8%. Switzerland holds a 5.3% share. When other European countries and their associated jurisdictions are included, Europe's total share reaches 72%. The Haven Score is another key indicator used in the report. It measures the extent to which a jurisdiction's laws and regulations create opportunities for corporate tax avoidance, whether intentional or not. In 2024, the UK's network of Overseas Territories and Crown Dependencies dominated the rankings, with eight jurisdictions receiving the highest possible score of 100. The UK's score is 59. Aside from the UK network, Switzerland (89) has the highest Haven Score in Europe, while Ireland and Cyprus (both 79) lead within the EU. Portugal has the lowest score at 46. In 2021 alone, multinational corporations are estimated to have shifted €1.2 trillion worth of profits into jurisdictions with low or no tax rates, contributing to a €294 billion loss in direct tax revenue for governments globally. Global Scale Weight is another indicator that measures how much financial activity conducted by multinational corporations enters or exits a given jurisdiction. Europe and its overseas territories account for 61% of global financial activity, with the UK and its network holding the largest individual share at 16%. Among individual European countries, the Netherlands has the highest scale weight at 11.1%, followed by Luxembourg at 8.8%. The UK (8.3%), Germany (4.2%), Switzerland and Ireland (both at 3.4%), and France (3.1%) are also among the European countries with the highest scale weights. When a country offers special tax incentives or preferential tax arrangements to multinational corporations, these companies often end up paying significantly less than the statutory corporate income tax rate on their profits. This can result in much lower lower effective tax rates—known as the Lowest Available Corporate Income Tax Rate (LACIT). This measure is produced by the Tax Justice Network through analysis of potential legal disparities and tax planning strategies. According to the OECD, the statutory corporate income tax rate is zero in all eight of the UK's Overseas Territories and Crown Dependencies. However, there are significant discrepancies between statutory rates and the documented lowest available corporate income tax rates (LACIT) in several jurisdictions. The gap between statutory corporate tax rates and LACIT rates highlights the potential for tax planning strategies that can result in much lower effective rates. For example, in Luxembourg, the statutory rate is 24.9%, while the LACIT is just 0.3%. In Switzerland, the statutory rate is 19.7% vs. 2.6% LACIT, and in Ireland, the gap is 12.5% vs. almost zero. Belgium shows a difference of 25% vs. 3%, while Malta has the largest gap, with a statutory rate of 35% and a LACIT of just 5%. The Netherlands also demonstrates a sharp contrast, with a statutory rate of 25.8% vs. 5% for the LACIT. In its overseas territories, such as Aruba and Curaçao, statutory rates drop from over 20% to 0%. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Euronews
14-05-2025
- Business
- Euronews
Inside the European centres favoured for cross-border tax planning
Countries are estimated to be losing €416 billion ($492 billion) in tax revenue each year due to profit shifting by multinational corporations and offshore tax arrangements by wealthy individuals, according to the State of Tax Justice 2024 report by the Tax Justice Network. The UK, along with its Overseas Territories and Crown Dependencies, is cited in the report as the largest contributor to global tax revenue losses, accounting for 26% of the total. The report finds that Europe and its associated jurisdictions are collectively linked to over 70% of the risk of corporate tax base erosion globally. So, which European jurisdictions are most frequently used in international tax planning structures? Which countries play a prominent role in enabling such practices? And where do current rules make it easier for corporations to minimise their tax liabilities? The Corporate Tax Haven Index (CTHI) assesses jurisdictions based on how much they contribute to enabling multinational corporations to shift profits and reduce tax payments, using a system of scores and indicators developed by the Tax Justice Network. A jurisdiction's CTHI value reflects the extent of its involvement in facilitating global corporate tax base erosion, as calculated by the index. According to the 2024 report, countries are ranked by the scale and aggressiveness of their tax systems in offering corporate tax avoidance opportunities. The UK's network of Overseas Territories and Crown Dependencies features prominently. The British Virgin Islands, Cayman Islands, and Bermuda occupy the top three positions in the index, each scoring over 2,400 points. Among European jurisdictions, Switzerland holds the highest score outside the UK network (2,279), while the Netherlands (1,945) ranks highest within the European Union. Among Europe's top five economies, the UK (894) has the highest CTHI value, closely followed by France (883). Germany scores 590, with Spain at 557. Italy performs the best with a score of 342—since a lower score indicates better performance in limiting corporate tax avoidance. The CTHI Share is a critical metric that measures the proportion of global corporate tax avoidance risk attributed to each jurisdiction. According to the report, the UK and its network of Overseas Territories and Crown Dependencies are responsible for one-third of global corporate tax avoidance risks, while EU countries account for another third. Breaking it down further, just three British Overseas Territories account for 19.7% of global corporate tax avoidance risks: the British Virgin Islands (7.1%), the Cayman Islands (6.7%), and Bermuda (5.8%). In comparison, the UK itself accounts for just 2.1% — still the highest share among Europe's top five economies, followed closely by France, also at 2.1%. Germany and Spain have similar shares, at 1.4% and 1.3% respectively, while Italy is responsible for just 0.8%. Switzerland holds a 5.3% share. When other European countries and their associated jurisdictions are included, Europe's total share reaches 72%. The Haven Score is another key indicator used in the report. It measures the extent to which a jurisdiction's laws and regulations create opportunities for corporate tax avoidance, whether intentional or not. In 2024, the UK's network of Overseas Territories and Crown Dependencies dominated the rankings, with eight jurisdictions receiving the highest possible score of 100. The UK's score is 59. Aside from the UK network, Switzerland (89) has the highest Haven Score in Europe, while Ireland and Cyprus (both 79) lead within the EU. Portugal has the lowest score at 46. In 2021 alone, multinational corporations are estimated to have shifted €1.2 trillion worth of profits into jurisdictions with low or no tax rates, contributing to a €294 billion loss in direct tax revenue for governments globally. Global Scale Weight is another indicator that measures how much financial activity conducted by multinational corporations enters or exits a given jurisdiction. Europe and its overseas territories account for 61% of global financial activity, with the UK and its network holding the largest individual share at 16%. Among individual European countries, the Netherlands has the highest scale weight at 11.1%, followed by Luxembourg at 8.8%. The UK (8.3%), Germany (4.2%), Switzerland and Ireland (both at 3.4%), and France (3.1%) are also among the European countries with the highest scale weights. When a country offers special tax incentives or preferential tax arrangements to multinational corporations, these companies often end up paying significantly less than the statutory corporate income tax rate on their profits. This can result in much lower lower effective tax rates—known as the Lowest Available Corporate Income Tax Rate (LACIT). This measure is produced by the Tax Justice Network through analysis of potential legal disparities and tax planning strategies. According to the OECD, the statutory corporate income tax rate is zero in all eight of the UK's Overseas Territories and Crown Dependencies. However, there are significant discrepancies between statutory rates and the documented lowest available corporate income tax rates (LACIT) in several jurisdictions. The gap between statutory corporate tax rates and LACIT rates highlights the potential for tax planning strategies that can result in much lower effective rates. For example, in Luxembourg, the statutory rate is 24.9%, while the LACIT is just 0.3%. In Switzerland, the statutory rate is 19.7% vs. 2.6% LACIT, and in Ireland, the gap is 12.5% vs. almost zero. Belgium shows a difference of 25% vs. 3%, while Malta has the largest gap, with a statutory rate of 35% and a LACIT of just 5%. The Netherlands also demonstrates a sharp contrast, with a statutory rate of 25.8% vs. 5% for the LACIT. In its overseas territories, such as Aruba and Curaçao, statutory rates drop from over 20% to 0%. Nvidia's shares surged 5.6% on Tuesday, boosted by a tens-of-billions-of-dollars artificial intelligence (AI) investment plan agreed between the US and Saudi Arabia. However, the AI powerhouse's stock remains down 4.5% year-to-date as of market close on 13 May, facing challenges stemming from US-China trade tensions and the launch of China's DeepSeek, a lower-cost AI model. CEO Jensen Huang was among the US tech leaders—alongside Tesla's Elon Musk, OpenAI's Sam Altman, AMD's Lisa Su, Palantir's Alex Karp, and other executives—who accompanied President Trump on his visit to Saudi Arabia. At the investment conference, the White House announced a $600 billion investment pledge by the Middle Eastern kingdom into the US, including a nearly $142 billion defence sales deal, an $80 billion commitment into 'cutting-edge transformative technologies' in both countries, and other agreements across energy, aerospace, and sports sectors. Trump also vowed to lift all sanctions against Syria during his visit, a political gesture to warm the relationship with key Middle East countries. He is also going to meet leaders of Qatar and the United Arab Emirates (UAE) later this week. Nvidia announced it will partner with HUMAIN, a subsidiary of Saudi Arabia's Public Investment Fund focused on AI, to transform the Kingdom of Saudi Arabia (KSA) into 'a global powerhouse in AI, cloud and enterprise computing, digital twins and robotics.' Nvidia will supply its most advanced AI chips over the next five years, including 18,000 units of the GB200 Grace Blackwell AI supercomputer with its InfiniBand networking in the initial phase. The purchase forms part of a broader project for HUMAIN to build AI factories in the kingdom, with a projected capacity of up to 500 megawatts. The announcement also includes a deal with the Saudi Data & AI Authority (SDAIA), which will 'deploy up to 5,000 Blackwell GPUs for a sovereign AI factory and enable smart city solutions.' Aramco Digital, the technology arm of oil giant Saudi Aramco, will also collaborate with Nvidia to develop AI infrastructure in the country. Saudi Arabia, an oil-rich nation, is seeking to diversify its economy, which still relies heavily on crude exports. The kingdom aims to attract $100 billion in foreign direct investment annually, as outlined under its Vision 2030 strategy. According to a Bloomberg report, the Trump administration is also considering a deal with the UAE, which would permit the import of over one million advanced Nvidia chips—well above the export limits imposed under the Biden administration. Other major US tech firms, including AMD, Global AI, Amazon, Cisco, and OpenAI, also announced AI investment plans in Saudi Arabia during the event. Trump's Middle East trip is shaping up to be a major win for US AI chipmakers, as the president looks to ease export curbs to China. On the same day, the US Department of Commerce (DOC) announced that it is rescinding the AI diffusion rule imposed during former President Joe Biden's administration, which had been due to take effect on 15 May. Biden's administration had implemented fresh restrictions on AI chip exports to China in January, its final month in office, expanding controls to much of the world, amid concerns that China was accessing US AI chips via third countries. Both Saudi Arabia and the UAE had also been subject to those restrictions. 'The Trump administration will pursue a bold, inclusive strategy to advance American AI technology with trusted foreign partners, while keeping the technology out of the hands of our adversaries. At the same time, we reject the Biden administration's attempt to impose its own ill-conceived and counterproductive AI policies on the American people,' stated the DOC. The department added that the Bureau of Industry and Security (BIS) issued new guidance to strengthen controls over overseas exports of AI chips to limit China's access to advanced US technologies.
