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Today the Tax Justice Network published two reports on real estate transparency. The first one, “Beneficial ownership of real estate around the world” summarises the findings of the Financial Secrecy Index on real estate transparency. It also it updates the report “Beneficial ownership registration around the world 2022” by assessing the state of play of beneficial ownership registration as of 2026, and checks which beneficial ownership laws trigger registration based on holding or acquiring real estate. The report identifies the frameworks and countries with the best real estate infrastructure (e.g. central, online real estate registries) and transparency (e.g. online, free and public access to information on real estate ownership). It also compares the results based on geographical region and membership to the OECD to explore the reasons that may explain why some countries are at the vanguard of real estate transparency, while others are lagging behind.
The second report “Integrating the Collection, Use and Exchange of Real Estate Ownership Information” explains the importance of beneficial ownership of real estate to tackle illicit financial flows. The report also explores all the potential sources of real estate information, considering the advantages and disadvantages of each one (e.g. the real estate registry, the tax administration, the financial intelligence unit, as well as banks, insurance companies, real estate brokers and public notaries subject to anti-money laundering requirements). On exchange of information, the report discusses the different frameworks for international exchanges (e.g. mutual legal assistance, sharing of financial intelligence and exchanges for tax purposes), illustrating how all new frameworks for automatic exchange of information (e.g. exchanges of information on immovable property, digital platforms, financial accounts and crypto-assets) could complement each other to offer information on foreign real estate held by nationals of each country. Finally, the report proposes how to integrate all this information into one platform to allow authorities as well as other stakeholders (e.g. investigative journalists, civil society organisations) to access and use this information to tackle financial crimes.
A brief summarising both reports is available here.
The tax justice movement awaits the publication of the first full draft of the UN Framework Convention on International Tax Cooperation (UNFCITC). It is expected within the coming days.
For those not intimately following the UN intergovernmental negotiations over the last two years, the Report of the High Level Panel on Illicit Financial Flows from Africa strikes at the core of why the status quo in international tax cooperation needs to change:
“The radical reduction of illicit capital outflows from [Africa], short of ending them, is precisely the outcome [Africa] and the rest of the world must achieve to produce this strategically critical new balance…
“As a Panel we are convinced that the goals of ending poverty in the world, reducing inequality within and among nations, and giving practical effect to the fundamental objective of the right of all to development remain vital pillars in the historic process to build a humane, peaceful and prosperous universal human society.”
(Chairperson Thabo Mbeki, p4 of the report)
Ahead of the fifth session of the intergovernmental negotiations to be held in New York, 3-13 August 2026, the draft text will be published in full. Many of the contentious issues are already clear from the previous sessions.
Some of the concepts under discussion are not yet clearly defined, and remain abstract yet are foundational for the successful implementation and operationalisation of the Convention’s principles and commitments. To help shed some light, in advance of the opportunity to comment upon and influence full draft text for the Convention and the two early Protocols, we wanted to support a nuanced understanding and discussion of these concepts. In a series of four webinars we brought together researchers, governmental negotiators and advocates to unpick some of the complexity and the implications.
To agree a common understanding of such issues opens up the space to create a high reaching and legitimate UN tax convention. This is surely what we need to change our world and to flourish!
You can find recordings of the first four webinars below. We plan to delve into to other topics later in the year.
Harmful Tax Practices – defining potentially unacceptable State behaviours.
Foreseeable Relevance – as a limiting criterion for the exchange of information between states.
Value Creation – as a potentially problematic basis for determining the location of companies’ real activity.
Illicit Financial Flows – an agreed component of the negotiations, with a formal UN statistical definition and potentially wide implications.
Background resources can be found here on our dedicated UN tax convention page
Debates about taxation are often shaped less by evidence than by politically convenient narratives. Across many countries, claims that taxes are the primary cause of low wages, weak growth or economic stagnation frequently gain traction despite limited empirical support. For those concerned with tax justice, the issue is not whether taxes should ever be criticised, but whether public debate is grounded in evidence rather than assumptions.
Spain offers a useful example. Arguments that employer social contributions are the main cause of stagnant wages have become increasingly prominent in political debate. Yet the available evidence suggests a more complex picture, raising broader questions about how tax policy is discussed and whether tax cuts are being presented as solutions to problems they may not actually address.
The only thing more disappointing than Spanish wages is the political debate surrounding them. According to the OECD, Spain’s real wages have grown just 5% since 1995, one of the lowest rates in the developed world. That figure deserves a serious diagnosis. Instead, like in many political arenas, opposition parties and outlets offer a comfortable narrative, statistically questionable and with solutions that would resolve nothing except the political problem of having to talk about the real economy.
The Spanish debate illustrates how discussions about taxation can become detached from the available evidence. Rather than focusing on the structural causes of wage stagnation, it increasingly seeks to blame unsatisfactory salaries on the burdens corporations must pay to fund increasingly skimpy welfare states. At least in Spain’s case, however, the data does not support that narrative, and there is little reason to believe that lower payroll taxes would deliver the wage growth their advocates promise.
Source: Own elaboration based on OECD data
In Spain, the “tax hell” discourse isn’t new, but it’s taken on a fresh form. Faced with the evidence that Spain’s personal income tax isn’t particularly high compared to its peers, its proponents have shifted the argument toward employer social contributions, in the form of payroll taxes.
They state that a Spanish employer pays approximately 30% on top of gross wages in Social Security contributions; once you add what the worker pays, you arrive at a total burden that supposedly turns Spain into a disguised tax hell. The following chart has been circulating for months, republished by outlets and commentators of a libertarian and conservative bent.
Source: Own elaboration based on OECD data
In the table, you can indeed observe that Spain has above-average payroll tax contributions on behalf of employers, which contribute to pensions and unemployment benefits and are known in Spain as social security contributions. Those parties and outlets who wish to lessen Spain’s already below-average tax-to-GDP ratio have seized on this data point.
Leader of the center-right opposition People’s Party (PP), Alberto Núñez Feijóo, summarised the argument recently: “Spain collects like a Nordic country but can’t have services like a third-world country.” Far-right Vox’s MP José María Figaredo went further, claiming that “the average worker has the state take roughly 50% of their work every year”, a figure constructed by counting employer contributions as wages stolen from the worker. Vox’s parliamentary spokesperson at the time, Iván Espinosa de los Monteros, drew a similar conclusion: the way to “raise wages” isn’t to increase the minimum wage, but to cut contributions and taxes. The cause behind low wages is supposedly well-known and easy to cure. But both the diagnosis and the cure might be mistaken.
According to Eurostat, Spain’s total tax take, taxes and contributions combined, represented 37.3% of GDP in 2023, below the EU average of 40.4%. France sits at 46.1%, Belgium at 44.8%, Austria at 43.1%, Italy at 42.4%. If Spain is a tax hell, most of Western Europe has been burning at a much higher temperature for decades.
Admittedly, social contributions represent 34.1% of Spain’s total revenue, against an OECD average of 24.8%. But Spanish companies offset that higher contribution burden with a corporate tax whose effective average rate, after deductions, depreciation, and special regimes, sits among the lowest in Western Europe. Social contributions aren’t an additional tax on businesses; they’re compensating for a corporate income tax whose effective rate, at 15.4% in 2023, sits well below the OECD average of 20.2%. Changing the label doesn’t change the bill.
You could argue that even if contributions function as an alternative business tax, cutting them would still create room to raise net wages. This trickle-down argument has permeated public discussions for decades. In Spain, that simple logic only holds up until you look at what actually happened.
In 1997, under José María Aznar’s PP government, the labour reform cut employer contributions by between 40% and 90% for permanent contracts targeting workers under 30 and over 45. Columbia University economist Ferrán Elías analysed the real effect using Social Security administrative data on more than one million workers. His conclusion was that the reduction generated a modest employment effect among workers under 30, a 2.42% increase in hirings, but wages didn’t move. For workers over 45, not even that. The tax cut translated into a transfer to companies, funded by taxpayers.
The academic research group Equalitas, studying the same reform, found that the slight wage improvement observed in that period came from the simultaneous reduction in dismissal costs, not the contribution cut. Their phrasing is direct: “with a weak link between contributions and benefits, payroll taxes are not fully passed on to employees, and employment falls.”
Additionally, the most exhaustive review of the literature for Spain, by Ángel Melguizo in Hacienda Pública Española, reaches the same wall: “results are not robust, ranging from full pass-through to zero pass-through.” The outcome depends on collective bargaining structure. In Spain, sectoral agreements set wage floors for the vast majority of private sector workers regardless of what a company contributes. Hence, the tax saving simply doesn’t reach the worker’s pocket.
Spain’s economy is overly concentrated in tourism, hospitality, and construction, sectors of low productivity and modest pay, with chronically insufficient investment in R&D and a dual labour market that weakens workers’ bargaining power. According to BBVA Research, the gap between productivity and wages, not fiscal pressure, is the central explanation for Spain’s wage stagnation. Cutting contributions doesn’t build a manufacturing industry, generate patents, or improve vocational training. It’s like trying to modernise the country by changing the ministry’s logo.
Furthermore, anti-fiscal rhetoric against left-of-centre administrations cools fast upon reaching office. In Italy, with a fiscal burden of 42.4% of GDP, Giorgia Meloni arrived promising a tax revolution. The headline achievement of her 2026 budget was an income tax cut that returned €408 per year to executives, €123 to office workers, and €23 to manual workers. Less a revolution, more finding a twenty-euro note in an old coat pocket.
The Spanish precedent is more direct. Few prime ministers have captured the gap between rhetoric and reality with such inadvertent honesty as former Spanish Prime Minister Mariano Rajoy, “I said I was going to cut taxes and I am raising them.” His government raised standard VAT from 18% to 21%, the reduced rate from 8% to 10%, and income tax rates by up to seven points, the largest tax increase in Spanish democracy according to the Ministry of Finance itself. Unfortunately, this was part of an austerity drive more concerned with maintaining the creditworthiness of Spanish bonds than with redistributing and reinvesting Spanish wealth.
Undoubtedly, the Spanish tax system is improvable, and Spanish net wages are poor relative to European neighbors. The failure to deflate income tax brackets has had a real negative effect on middle and lower earners, and there are VAT categories worth revising. There’s a serious fiscal conversation to be had. But that’s not what’s currently on air.
If PP or Vox reached government and cut employer contributions, the evidence gives no reason to expect higher wages. The most likely result is a larger public deficit and better margins for Ibex companies that just closed their best year since 1993, up 49% and at historic highs, without any of that pulling wages up with them. Low wages are the product of an economy that hasn’t modernised its productive structure in decades. That’s the debate Spaniards deserve to have.
Editor’s note: Public debates about taxation are often shaped as much by political narratives as by evidence. In this guest article, Nicolas Brennan Hernandez, an economist specialising in international trade and political economy, examines the current debate on wages and taxation in Spain, arguing that tax policy discussions should be grounded in empirical evidence rather than misleading rhetoric. The views expressed are those of the author.
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Since 2009, the Tax Justice Network has published the Financial Secrecy Index. This is a ranking of jurisdictions around the world, based on a thorough assessment of financial transparency and relevant areas of international cooperation. By combining the overall secrecy score with a global scale weight, the ranking reflects the share of global financial secrecy risk that each jurisdiction poses.
The Financial Secrecy Index is now widely used and trusted by organisations across the world, for research, policy analysis, criminal investigations and to carry out geographic risk assessment for anti-money laundering purposes. Those who use, cite and/or recommend the index include multiple UN bodies, the International Monetary Fund, World Bank, OECD, the European Commission, the FBI and the broader ‘Five Eyes’ intelligence alliance, along with a growing number of financial institutions.
A key insight of the Financial Secrecy Index is that the analysis is not binary. It is unhelpful to try to identify a set of jurisdictions that are bad (to be labelled ‘tax havens’, perhaps, or ‘non-cooperative jurisdictions’), while all others are by default deemed to be good. Instead, according to the Tax Justice Network, there is a spectrum of financial secrecy, by which all jurisdictions have a secrecy score substantially higher than zero (which would indicate perfect transparency and cooperation). All jurisdictions can make progress, and reduce the damage they cause worldwide. But some have greater responsibility than others.
The second insight is that the main global threats are not the small islands fringed with palm trees that remain a media trope for thinking about tax havens. When jurisdictions are assessed objectively on the basis of robust, verifiable criteria, it turns out that the greatest global risks by far are attributable to some of the major financial centres.
The United States has ranked first and worst since 2022. In the latest update to the Financial Secrecy Index, that position is only confirmed. With the Trump administration having pushed back against key areas of progress initiated under its predecessor, the US continues to pose the greatest threat to the rest of the world by facilitating crossborder tax abuse and the laundering of the proceeds of corruption and other crime.
Rather than update every component of the Financial Secrecy Index in a single revision every two years, we have recently adopted rolling updates. This allows us to keep the Index relatively fresh, while focusing each update on particular variables. The 2026 update addresses the indicators of so-called ‘golden visas’, by which jurisdictions sell citizenship and/or residency programs with no requirement for a minimum physical presence in the country and exacerbate risks of financial crime; and the transparency of real estate ownership.
The ease with which high-value property can be acquired and transferred makes real estate a prime asset for those seeking to park illicit gains. As such, effective transparency of the beneficial owners is a critical measure to protect the jurisdiction where the property is located, whose markets can become heavily distorted as they are also increasingly home to corrupt funds. This transparency is also important to protect those jurisdictions from which the dirty money funding the acquisition flows.
The real estate ownership transparency assessment in the Financial Secrecy Index is constructed to reflect the general availability of ownership data for immoveable property in each jurisdiction, as well as the ability of foreign companies and other legal vehicles such as trusts to hold local property while keeping the ultimate beneficial owners anonymous. The resulting score ranges from 0 to 100.
Jurisdictions scoring zero, for perfect transparency in this area include Denmark, Slovenia and Luxembourg. The latter might seem surprising, given Luxembourg’s longstanding role in financial secrecy provision more broadly. However, the jurisdiction has shown a greater willingness to address transparency concerns when they affect its own scant area than when they arise in its wider offshore financial sector, which continues to facilitate anonymous ownership of financial assets and income streams.
Most jurisdictions have intermediate scores – from Spain (25), China (40) and Norway (45) at the lower end, to Germany (55), Qatar (70) and the UK (both 80).
The perfect failure, a score of one hundred, is obtained by a small but significant group of countries – significant because they include some of the biggest real estate markets in the world like Canada, Australia, and Mexico.
Alongside the 2026 update of the Financial Secrecy Index, we have constructed a separate Real Estate Secrecy Index, which follows the methodology of the overall Financial Secrecy Index. This combines the secrecy score with a measure of global scale, in a cubic/cubed root formula to balance the components. Here we use the specific secrecy score of the real estate ownership indicator, and combine it with a measure of the market size for commercial real estate in each jurisdiction.
| Country | Commercial real estate market, $bn | Real estate secrecy score (SI06) | RESI value | RESI rank |
| United States | 12440.77 | 100 | 678,425 | 1 |
| Canada | 985.4 | 100 | 291,356 | 2 |
| Australia | 788.2 | 100 | 270,457 | 3 |
| India | 687.75 | 100 | 258,442 | 4 |
| Mexico | 558.86 | 100 | 241,168 | 5 |
| Indonesia | 312.98 | 100 | 198,789 | 6 |
| United Arab Emirates | 235.01 | 100 | 180,682 | 7 |
| United Kingdom | 1533.91 | 80 | 172,884 | 8 |
| Italy | 1025.83 | 80 | 151,187 | 9 |
| Malaysia | 128.86 | 100 | 147,885 | 10 |
| Switzerland | 400.9 | 80 | 110,535 | 11 |
| Saudi Arabia | 536.73 | 70 | 81,614 | 12 |
| Sri Lanka | 19.57 | 100 | 78,901 | 13 |
| Turkiye | 394.72 | 70 | 73,668 | 14 |
| Chile | 112.01 | 80 | 72,262 | 15 |
As the table of the top 15 jurisdictions shows, the worst actor in terms of the global risks posed through real estate secrecy is the same as for overall financial secrecy: the United States.
The other worst-ranked jurisdictions include some with large markets but somewhat better transparency (eg the UK and Italy), and a number with much smaller markets but perfect failure scores for secrecy, such as the United Arab Emirates (UAE). Not shown are the many jurisdictions with much larger markets than the UAE, but much stronger transparency that rank far down the index, including China, France, Germany, Japan and South Korea.
The UK has rescheduled its Illicit Financial Flows summit for December 2026. One component of the summit is intended to address the transparency of real estate ownership, and it is understood that discussions continue with invited jurisdictions. Meanwhile the UK government’s Anti-Corruption Champion (and long-time opponent of financial secrecy), Baroness Margaret Hodge, is working on a broad analysis of ownership transparency that is expected to make key recommendations in the coming months.
The opportunity is clear, to set a new standard and lead a global shift away from secrecy in some of the world’s largest real estate markets. With political commitment, the UK can advance into its summit with policies in place to reach the gold standard of transparency, and credibly encourage a range of participants to do likewise.
Many countries in the global South outperform major OECD countries. The OECD’s 2025 standard on exchange of immoveable property information will commence its first exchange in 2029 but so far has fewer than 30 members. With no loss of time, an obvious alternative would be to support a globally inclusive instrument to be developed as part of the ongoing negotiations on the UN Framework Convention on International Tax Cooperation.
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In a world where we push people crossing seas in small boats back into dangerous open water and build ever higher walls to keep out people who seek a better life, the commodification of citizenship and residency and the selling of golden visas to the richest raises serious moral concerns. The Golden Visas indicator of the Financial Secrecy Index shows that the practice of investment immigration also raises serious financial secrecy concerns.
The ‘Golden Visas’ indicator assesses the financial secrecy risk posed by investment immigration by scoring countries on two separate components: how strict or lax their rules on citizenship and residency are (based on whether they offer golden visa programmes), and the comprehensiveness of their personal income tax regime. Given that the interaction of the two components can trigger additional secrecy risks, countries are also scored on the combination of scores they get on the two components.
So, if a country scores badly on the first component and badly on the second component, it gets additionally penalised in its total score for the indicator. That’s because the risk of an individual pretending to be resident in another country just to underpay personal income tax someplace increases if said country has both weak citizenship and residency rules and weak personal income tax rules.
Golden visa programmes can create significant financial secrecy risks by providing opportunities for money laundering, tax evasion and the circumvention of transparency measures.
Below, we provide more details on the indicator’s components and on the results of our most recent assessment of the 141 jurisdictions covered by the Financial Secrecy Index.
Strict or lax citizenship/residence rules
One of the aspects assessed under the Golden Visas indicator is whether countries have strict or lax citizenship or residency rules based on any available citizenship by investment (CBI) or residency by investment (RBI) programmes. These programmes grant citizenship or residency if the applicant makes a passive investment in the country (eg in purchasing local real estate, shares in local companies, or bank deposits or donations). We consider these rules to be lax and pose risks if they do not require sufficient physical presence.
Citizenship or residence by investment programmes without the requirement of sufficient physical presence are known to provide a range of opportunities to hide assets, mask suspicious high-value transactions or enable the movement of significant sums of illicit funds across the borders. These risks are well documented, including by the OECD and the FATF in their recent publication on ‘Misuse of Citizenship and Residency by Investment’.
Our findings show that the number of jurisdictions assessed as having lax citizenship or residency rules increased from 73 out of 141 jurisdictions in 2021 to 81 jurisdictions in 2026.
Worryingly, among those countries having regressed into the adoption of lax citizenship/residency rules are a significant number of Global South countries. Countries like Namibia, Nauru and Rwanda have historically stayed clear of polices that score negatively on the Financial Secrecy Index, consistently landing them in the bottom half of the index’s ranking. The regression on citizenship/residency rules is out of character for the countries financial secrecy risk profiles.
Countries often adopted lax citizenship/residency rules under the impression that doing so has the potential to boost domestic resource mobilization through investment migration. It is not disputed that there is money to be made by countries in the sale of golden visas. Citizenship by investment passport sales in Dominica, for example, are reported to have accounted for up to one third of the country’s gross domestic product in recent years. However, as noted by the IMF in a recent study, countries should be wary about expecting similar revenue windfalls based on anecdotal evidence. The authors conclude that for most countries, the likely effects of golden visa programmes may not be beneficial and might be outright harmful. A recent study by the United Nations details how criminal groups in Southeast Asia are increasingly targeting citizenship by investment schemes in the region to circumvent law enforcement.
Comprehensive personal income tax (and the lack thereof)
For a personal income tax to be comprehensive in its scope, it needs to apply the same tax base rules – a rate above zero per cent – equally to all natural persons considered tax residents, including all income from any sources across the world. Any opt-out from the general tax regime in a certain jurisdiction (eg lump sum taxation, tax exemption on foreign-sourced income, territorial tax base or taxes on a remittance basis) results in the jurisdiction being considered by the indicator to not have a comprehensive personal income tax. It can also be the case that the country does not even levy a personal income tax.
The number of jurisdictions without a personal income tax is 17, 15 of which offer golden visa programmes. This combination of components presents a significant problem to automatic exchange of information, as will be explained below.
Avoiding the Common Reporting Standard (CRS) and Crypto Asset Reporting Standard (CARF)
Since the inception of the Common Reporting Standard (CRS) in 2014, the Tax Justice Network has consistently warned that the combination of citizenship and residency by investment regimes and low or no personal income tax in a country creates a specific risk for abusive behaviour, namely Common Reporting Standard avoidance. With the Crypto Asset Reporting Standard (CARF) coming into for this year, this risk of avoidance now also extends to the new standard.
Avoidance of reporting under either standard can take place if the owner of a financial account or crypto wallet in Country A obtains a golden visa in Country B and uses their new passport to record Country B as their country of residence for reporting purposes under the standards. Country B will receive the automatically exchanged information on taxable income and assets. If Country B does not levy income tax on the offshore income and assets, the information is exchanged but not used. At the same time, Country A, the genuine residence country, will be left in the dark regarding its resident’s foreign finances.
The OECD, aware of the abovementioned risk, keeps as of 2018 an updated list with jurisdictions that operated citizenship and residence by investment schemes that can potentially be abused for to avoid reporting under the Common Reporting Standard. Jurisdictions are listed if they give a taxpayer access to a low personal income tax rate of less than 10% on offshore financial assets and do not require significant physical presence of at least 90 days in the jurisdiction offering the citizenship and residence by investment scheme (see OECD FAQ). Based on this methodology, 13 jurisdictions are currently listed.
The Golden Visa indicator casts a different and wider approach to identify jurisdictions that pose a high-risk of Common Reporting Standard avoidance. Under the indicator, high-risk jurisdictions are those that have a citizenship and residence by investment scheme that does not require 183-day physical presence, and have either a complete absence of personal income tax or active choose ‘voluntary secrecy’ under the Common Reporting Standard. As explained in detail in the indicator on automatic exchange of information, voluntary secrecy jurisdictions participate in the Common Reporting Standard but have actively opted out of receiving information from other jurisdictions on their residents’ offshore accounts.
As a result, the indicator identifies a larger and different group of jurisdictions that potentially pose a high risk to the integrity of the Common Reporting Standard than the group of jurisdictions listed by the OECD. This larger group of high-risk jurisdictions consists of the jurisdictions that score a maximum secrecy score on the indicator.
It also means that certain jurisdictions listed by the OECD as high-risk are not considered to be high-risk (or highest-risk) by the Financial Secrecy Index and vice versa. Monaco, for example, is considered a high-risk jurisdiction under our indicator because it has no personal income tax and a golden visa regime that requires only 90 days of presence. These 90 days are sufficient for the OECD to consider Monaco non-risky. The opposite is true for Cyprus. Cyprus has a problematic golden visa regime earning it a high-risk grading by the OECD, but because it has a personal income tax (albeit with important exemptions), the indicator qualifies it as less risky.
In total, we have identified 21 jurisdictions that pose a high-risk for avoiding the Common Reporting Standard. New additions on the list of high-risk citizenship and residence by investment regimes are Kuwait and Nauru. Both countries are exercising voluntary secrecy under the Common Reporting Standard, and have recently jumped on the citizenship by investment (Nauru) and residency by investment (Kuwait) bandwagons.
Conclusion
Investment migration and especially the role played therein by golden visas is a controversial topic, as their issuance does not equate physical relocation of individuals. It usually means applicants obtain a secondary place of residency or citizenship, with the associated risk that the golden visa will be abused for nefarious purposes, like money laundering and tax evasion.
The new data under the indicator reveals two things. First, the number of jurisdictions with ‘lax’ citizenship/residency rules remains high. A number of countries have abolished their questionable citizenship and residence by investment regimes, whereas a slightly bigger number have introduced new ones. Another worrying trend is that these newcomers include Global South countries not generally known to be financial secrecy hotspots. Domestic resource mobilization through citizenship and residence by investment is not a good idea, however.
Meanwhile, countries have also not been addressed gaps in their personal income tax systems over the past five years. There is no significant change in the number of countries whose personal income tax systems are not comprehensive or who do no tax income altogether.
Second, the total of countries with lax citizenship/residency rules combined with the absence of personal income tax or the choice for voluntary secrecy under the Common Reporting Standard also remains high at 21 jurisdictions. The indicator shows that the financial secrecy risk caused by citizenship and residence by investment is of a wider scale than that estimated by the OECD and remains as problematic as ever. For money launderers and tax evaders, the buying of a golden visa remains one of the main ways to obtain financial secrecy.
We therefore advise: visa-selling countries beware (and reconsider)!
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There is weaponisation of privacy, and then there are cases that take it a step further. One thing is to close “public” access to information, as the infamous ruling of the European Court of Justice did to beneficial ownership information in 2022. But restricting routine access to information by tax authorities is another matter entirely. The European Court of Justice also did this in 2024, when it prevented Luxembourg tax authorities from accessing information held by a law firm to respond to a request from Spain. In that case at least, legal professional privilege (a sharp double-edged sword against privacy) was also at play. Now, the European Court of Human Rights (ECHR) has taken a similar approach. In the ruling Ferrieri and Bonassisa v. Italy of May 2026, it prevented Italian tax authorities from accessing local banking data on Italian taxpayers because it breached the right to privacy.
Again, the tax authority didn’t want to access medical records, WhatsApp messages or personal photos. Italian tax authorities only sought information from banks including bank account details, transaction histories, and details of other financial operations.
Importantly, the ECHR ruling also notes that, based on domestic regulations, these access powers are not a blank check, but based on objective criteria, mainly upon any indication of tax evasion or high-risk transactions:
“the Tax Authority established criteria for selecting taxpayers and investigation methods in relation to checks on income tax and value-added tax. In respect of the criteria for carrying out tax audits of banking data, the relevant part of the circular read as follows:
‘Tax audits of banking data will, in particular, be carried out in respect of
- total or near-total tax evaders;
- persons with no accounting records or with accounting records that are obviously unreliable;
- persons carrying out import-export transactions;
- persons who have issued and/or used invoices for non-existent transactions; [and]
- persons whose financial capacity is clearly in stark contrast to the[ir] declared income.”
The ruling also described that Italian regulations require requests to be substantiated before tax directors can authorise them, and that these directors must check that those conditions are met:
“Circular no. 131/1994 further stated that tax offices asking for authorisation to carry out tax audits of banking data “[had to] sufficiently substantiate requests for authorisation to the regional directorates, in order to provide them with useful elements of evaluation”. In particular, a request had to indicate the following elements:
“- the data aimed at identifying the taxpayer;
- the reasons for undertaking the inquiry;
- the elements aimed at assessing the fiscal situation of the taxpayer;
- the reasons for considering that a tax audit of banking data would be useful in respect of the tax inquiry;
- the time period in respect of which the tax audit of banking data should be carried out;
- the banks … to which the request should be submitted …;”
Circular no. 131/1994 clarified that, on the basis of that information, the regional directorates had to check the formal and substantial legality (controllo sia di legittimità che di merito) of the request before issuing the requested authorisation.
The ruling’s description of Italian circulars also suggests that Italian tax authorities do not seem too eager to access banking data, because doing so involves more time and resources to finish the audit. For that reason, directors should only authorise such requests where the likely benefits justify the costs:
As regards a decision to carry out a tax audit of banking data, the circular further stated that the domestic authorities had to undertake a cost‑benefit analysis:
“It must be stressed that tax audits of banking data should be initiated in cases [where] the fruitfulness of the tax audit [in question] has been assessed. So, on the basis of common experience, the ‘costs’ of the tax audit (represented by the inevitable extension of the inquiry in terms of time and the complexity of the analysis of the accounts) must be weighed against the relative ‘benefits’ of an evidential nature, relating to the presumed size of the recoverable taxable amounts. The principle of economy of action (in terms of cost-benefit) must, moreover, strongly guide all the tax audit activity of the offices.”
And again:
“With specific regard to … financial investigations, it is reiterated that [they] must be used only after carefully assessing the risk of significant discrepancies in [a] tax declaration (significative anomalie dichiarative), and ideally only when the tax office has already instituted a tax inquiry.”
Taken together, these provisions suggest that Italian tax authorities are not particularly inclined to obtain banking information unless it offers substantive benefits compared to the costs involved.
However, the ruling focused on another issue. The ECHR ruling cited an Italian court decision suggesting that the final authorisation (likely from a director of a tax office) to request information from a bank did not need to be reasoned. In the court’s view, this gave the authorities unfettered discretion and made the measure incompatible with the right to privacy:
27. In judgment no. 8849 of 30 April 2015, the Court of Cassation observed that authorisation did not have to contain reasons, as no such requirement had been imposed under the applicable domestic provisions. The court held that such authorisation was merely an internal administrative act which could not be challenged by the bank that had been asked to provide the information, and the taxpayer concerned did not have to be notified of it. Since the authorisation could not be challenged, in the Court of Cassation’s view, it did not need to include any kind of reasoning.
…
81. The Court is prepared to accept that the clear and detailed criteria laid down in the circulars adopted and published by the Tax Authority [mentioned in the quotes above] might be sufficient to complement the applicable domestic provisions and delimit the scope of discretion conferred on the domestic authorities, provided that they are binding on the authorities.
However, this does not appear to be the case. In particular, the Court cannot but note that in the light of the Court of Cassation’s case‑law, authorisation does not have to contain reasoning (see paragraph 27 above). It follows that the authorities are not required to justify the exercise of their powers by giving reasons for their decisions and thereby showing that they are following the criteria laid down in the relevant domestic provisions, including the administrative circulars, resulting in them exercising unfettered discretion (see Bernh Larsen Holding AS and Others, cited above, § 130).
82. In the light of the above, the Court considers that the legal basis for the contested measures was incapable of sufficiently delimiting the scope of discretion conferred on the domestic authorities, and accordingly did not meet the “quality-of-law” requirement under Article 8 of the Convention.” (emphasis added).
Let’s recap. Tax authorities in all cases struggle to detect tax evasion. Tax evasion is not a binary issue. It’s not like mining for gold and you either find something yellow and shiny or you don’t. Tax evasion is determined after looking at what the taxpayer declared, the risk of transactions, and many other factors. Even then, it can only be confirmed after getting access to additional documentation (e.g. banking data) to verify the taxpayer’s declarations.
Even then, Italian tax authorities do not seem too eager about banking data. In addition to taxpayer rights’ concerns, Italian tax authorities’ circulars suggest that accessing banking information is mostly discouraged in the tax administrations’ own interest. It should not be done on a routine basis but only after a cost-benefit analysis because of the extra resources and time it will demand. For this reason, the tax auditor should provide reasons why access to banking data is necessary before the tax office director will authorise it. Once the director authorises it, however, the authorisation does not add to or explain the reasoning behind the request when asking the bank to provide the information (luckily, as the bank then tells its clients, as in this ruling). So, because this final authorisation does not require reasoning or justification, the ECHR found it to be discretionary and thus lacking a sufficient legal basis to justify interference with the right to privacy enshrined in Article 8 of the Convention for the Protection of Human Rights and Fundamental Freedoms.
We could be more sympathetic to the case if the tax authorities seemed to be exceeding their need for data, or going after political opponents or vulnerable populations. However, based on the limited information available in this case (the ruling also anonymises the full names of the taxpayers), it appears that they are ordinary taxpayers and that the tax authority only sought routine banking information.
While Italian law could perhaps be drafted more effectively, supranational courts need to understand the crippling effect of their rulings, especially at a time when inequality is soaring, tax authorities are being diminished (including in Italy), and tax transparency is being challenged on privacy, data protection and taxpayers’ rights grounds. After the European Court of Justice ruling of 2022, many European countries closed their beneficial ownership registries, including secrecy jurisdictions where the ruling was not even binding. The weaponisation of privacy, whether through court rulings or concerns about the EU’s General Data Protection Regulation (GDPR), can also result in self-censorship. A report by Transparency International described the challenges of investigating grand corruption when it comes to privacy:
“Privacy concerns compound the problem. Across EU member states, enforcement authorities have pointed to data protection rules, particularly the General Data Protection Regulation, as a major obstacle. Unclear or overly strict interpretations have fostered a climate of caution among data providers, who fear heavy fines for non-compliance. This has created a legal paradox: investigators need access to ownership and financial data to substantiate suspicion but cannot access that data until suspicion already exists.” (emphasis added)
In other words, this ruling is a new bump in the road in the fight against tax evasion and illicit financial flows, especially considering that the road is already in poor shape. Although this case dealt with access to information for domestic tax purposes, there have also been lawsuits seeking to stop the exchange of information for tax purposes.
If this weaponisation of privacy or abuse of taxpayers’ rights continues, it may not be long before new lawsuits or rulings begin requiring suspicion of tax evasion or the existence of a tax audit in order to narrow the scope of automatic exchange of information. Currently, automatic exchanges such as the OECD’s Common Reporting Standard and the Crypto-Asset Reporting Framework are useful precisely because they apply to all taxpayers. One could also imagine attempts to narrow access by tax authorities to domestic data based on conditions that apply to exchange of information on request, such as the “foreseeable relevance” requirement.
To address these secrecy risks, a UN Tax Convention may help strengthen tax transparency, particularly on access to and exchange of information, and counter the weaponisation of privacy. Countries in the Global South may also offer useful alternatives to current European approaches to privacy, data protection and tax transparency. For instance, in Argentina the tax authority routinely has access to bank account and credit card information on taxpayers above a relatively low threshold. Better examples need to be identified to counter the weaponisation of privacy in Europe.
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We’re pleased to share this blog from the Tax Justice Network chair Lyla Latif (Pan-African lawyer, academic, and policy strategist) on how domestic work platforms are replicating colonial labour exclusions in digital form. As Lyla writes: “This is not simply an administrative inefficiency. It is a form of structural injustice with fiscal mechanisms.” You can read the original blog here in The Elephant which provides African analysis, opinion and investigation. The image is Lucy Nyangasi, domestic worker, Kenya by Solidarity Center, licensed under CC BY 2.0.
There is a woman who crosses Johannesburg before dawn. She takes two taxis, changes in Bree Street, and arrives at a house in Sandton by seven. She will spend eight hours cleaning floors, scrubbing bathrooms, washing laundry, and caring for children who are not her own. She booked this job through an app on her phone, a platform that promises convenience to homeowners and flexibility to workers. By six that evening, she will be on her way home, exhausted, with R250 deposited into her bank account and nothing else to show for her labour. No Unemployment Insurance Fund contribution. No Compensation for Occupational Injuries and Diseases coverage. No formal tax record that would make her visible to the state as a worker deserving of protection. She is economically active, socially essential, and fiscally invisible.
This is the situation of hundreds of thousands of women working through domestic service platforms across Africa. SweepSouth, the largest such platform in South Africa, has over 1.2 million domestic cleaners registered on its app. The company’s own annual reports document that 92 per cent of these workers are women, the vast majority are Black, and 83 per cent are the sole financial providers for their families, and they are supporting an average of four dependents each. They are, in the language of economics, essential workers. In the language of the fiscal system, they do not exist.
To understand why this matters, one must go further back than the app, further back even than the post-apartheid constitutional settlement. The exclusion of domestic workers from labour and fiscal protection in South Africa was never accidental, it was a design feature of a colonial labour economy that needed Black women’s reproductive and care labour to be cheap, abundant, and invisible. The Natives (Urban Areas) Act of 1923, the Women’s Enfranchisement Act of 1930, and successive pass laws constructed a legal architecture in which Black women moved through cities as necessary to service white domestic life but were denied the civic status that would have made that service legally cognizable as work. They could not vote. They could not own urban property. They were excluded from the Unemployment Insurance Act of 1946 and from the Workmen’s Compensation Act of the same year on precisely the grounds that domestic service was not “real” employment within the meaning of those statutes. These were not neutral administrative decisions. They were the fiscal expression of a racial political economy that required the extraction of labour without the obligations of reciprocity.
The post-apartheid settlement has progressively extended formal protections to domestic workers through the Basic Conditions of Employment Act in 1997, the extension of Unemployment Insurance Fund coverage in 2002, the landmark Constitutional Court ruling in Mahlangu v Minister of Labour in 2021, which finally extended Compensation for Occupational Injuries and Diseases Act coverage to the domestic sector after a decades-long legal battle. Each of these victories was hard won and significant. Yet each has also been partial, operating at the margins of a fiscal and labour architecture that was built around the formal male waged worker as its normative subject. The platform model did not create this problem. It inherited it, systematized it, and gave it a new interface.
The promise of platform work was supposed to be different. The app would bring work to your fingertips. No more walking from house to house looking for “piece jobs”. No more uncertainty about whether you would earn anything today. The algorithm would match you with clients, the platform would handle payment, and everything would be documented, transparent, modern. Yet what has actually happened is something more troubling: the formalization of informality, the digitization of invisibility. The problem is not that these women are unregistered with the tax authority. Many of them are. The problem is that the entire fiscal architecture of the South African state was built around a model of the formal employee, someone who has an employer who deducts taxes at source, contributes to the Unemployment Insurance Fund, registers the worker with the Compensation Fund, and generates the documentary record of economic participation that makes a person legible to state institutions. The platform model deliberately avoids triggering any of these obligations by classifying workers as “independent contractors” rather than employees.
This classification is a legal fiction that merits examination under any honest application of the common law tests of employment. SweepSouth sets the prices. SweepSouth allocates the bookings. SweepSouth rates the workers and removes those whose ratings fall below the threshold. The platform controls every meaningful dimension of the working relationship, that is, the terms on which labour is offered, the discipline mechanism by which workers are sanctioned, the data through which their performance is assessed. But by calling these workers contractors, the company transforms what would be employer obligations into worker burdens. The woman cleaning the house in Sandton is now responsible for registering herself as a provisional taxpayer, filing biannual returns, and navigating a system designed for accountants and professionals. The results are predictable in that, according to SweepSouth’s own data, 77 per cent of domestic workers surveyed are not registered for Unemployment Insurance Fund. Only 12 per cent fully understand their rights under the Compensation for Occupational Injuries and Diseases Act. When a platform worker is injured cleaning a client’s home, she falls through a gap in the law: she is not an employee of the homeowner, and the platform denies that she is its employee either. The 2021 Mahlangu ruling, which extended the Compensation for Occupational Injuries and Diseases Act coverage to domestic workers, has not reached her.
The discipline of fiscal sociology, which traces the relationship between taxation, state formation, and social legitimacy, has long argued that a tax system encodes the political priorities of the state that designs it. Rudolf Goldscheid, writing in 1917, described the state budget as “the skeleton of the state stripped of all misleading ideologies”. More recently, scholars working in the tradition of feminist political economy, such as Kathleen Lahey and Miranda Stewart, have documented how tax systems systematically undervalue care work and reproduce gender hierarchies through apparently neutral rules. The South African fiscal system is an example of this dynamic in unusually sharp relief: a state that formally committed itself to gender equality and substantive transformation through its constitution continues to operate a tax and social insurance architecture that cannot see the economic contribution of the majority of women who work within its borders, precisely because those women do not work in the forms the system was built to recognize. Platform companies have understood this architecture better than the legislators who are supposed to regulate them, and they have designed their business models accordingly.
What makes this particularly urgent is that the model is replicating across the continent. Kenya has Lynk which operates with the same basic architecture of contractor classification and algorithmic management in the domestic and skilled trades sectors. Nigeria has Eden Life. Egypt has FilKhedma. Each of these platforms interacts with national fiscal systems that were not designed to see informal workers in the first place. These are systems inherited from or shaped by colonial administrations that likewise excluded domestic and care workers from formal fiscal recognition. The colonial and apartheid-era exclusions were constructed through explicit statutory text. The platform-era exclusions are constructed through contractual design and data architecture. The technical form has changed. The structural outcome has not. In each case, the state loses the fiscal data it would need to extend social protection, the worker loses the social protection to which she would otherwise be entitled, and the platform company captures the economic value of the labour without assuming the legal responsibilities of the employer.
The European Union has recognized this structural problem and moved to address it. The EU Platform Work Directive, which came into force in October 2024, establishes a rebuttable presumption of employment for platform workers across member states. This means that platforms like SweepSouth, were they operating in Europe, would be required to demonstrate that their workers are genuinely self-employed rather than placing the burden on exhausted, low-income women to prove that they have employment relationships they often do not fully understand. The Directive is imperfect; it took years of lobbying by platform companies to weaken its enforcement mechanisms, and transposition into member states’ national law will be contested. But it represents a legislative acknowledgement that the contractor classification model is a legal fiction incompatible with social protection obligations, and it places the burden of proof where the informational and legal power actually lies, that is, with the company. African states have no equivalent protection, and it is not sufficient to argue that African economies are “different” or that informality is somehow culturally embedded. Informality in Africa is structurally produced – by colonial labour law, by structural adjustment programmes that dismantled social protection systems in the 1980s and 1990s, and now by platform architectures that exploit the regulatory gaps those earlier transformations created.
Why does this matter beyond the individual hardship it produces? Because taxation is not merely about revenue collection. It is about the social contract between state and citizen, the mechanism through which economic contribution is recognized and social protection is earned. When a woman works for years through a platform, paying for transport, wearing out her body cleaning other people’s homes, and generating nothing that the fiscal state can see, something has fractured in the relationship between economic contribution and social protection. She is sustaining households. She is enabling the productivity of formal-sector workers who would otherwise have to provide their own childcare and domestic labour. She is performing work that the society she lives in cannot function without, and the systems that are supposed to recognize and reward economic contribution have no category for her existence. This is not simply an administrative inefficiency. It is a form of structural injustice with fiscal mechanisms.
The solution is not to extend the reach of existing systems without reconsidering their design premises. Fiscal systems built around the formal male waged worker cannot be made to see care work by simply adding a new registration category. They need to be redesigned on the premise that care work is economically valuable, that informal economic activity is legitimate economic activity, and that fiscal citizenship should not depend on participation in formal employment structures that were never designed to include the majority of those who work. This requires statutory reform in at least three directions: first, a rebuttable presumption of employment for platform workers that mirrors the EU approach but is adapted to African institutional contexts; second, care-adjusted social insurance contribution frameworks that account for the interrupted, part-time, and multi-employer nature of domestic and platform work; and third, algorithmic impact assessments for fiscal and labour systems, so that states can identify and remedy the discriminatory outcomes that digital management systems produce without anyone having consciously intended them. None of this is technically complicated. It is politically contested, because it would require platforms to assume costs they have successfully externalized onto workers and the public purse, and because it would require states to acknowledge that their fiscal architectures have reproduced, in digital form, the exclusions they formally committed themselves to dismantle.
This research forms part of Project TERRA (Technology, Equality, Regulatory Risk Assessment), a programme investigating how algorithmic systems interact with fiscal architectures to produce exclusion across Africa. The project is supported by Luminate and has enabled sustained research into the mechanisms through which digital transformation is reshaping how gender bias and fiscal policy interact across Africa. The woman crossing Johannesburg before dawn is not a marginal case. She represents the majority of those who labour in African economies, and her fiscal invisibility is not an oversight but an outcome, produced by specific legal choices that specific states have made or failed to make. The app did not create her invisibility. But it has perfected it, and the tax system is being asked to see her in a language it was never designed to speak.
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I was often told that ending poverty required economic growth.
Grow the economy. Create more wealth. Raise incomes. And poverty will eventually disappear.
Yet after decades of growth-centred policymaking, poverty remains widespread, inequality continues to rise, and governments around the world struggle to fund the public services people depend on.
What if poverty is not just the result of economies growing too slowly? What if it is also shaped by political choices about who benefits from economic activity, who accumulates wealth, and who is expected to pay for the systems that keep societies functioning?
These are some of the questions explored in the Roadmap for Eradicating Poverty Beyond Growth, launched in April following a three-year collaborative process led by Olivier De Schutter’s team and involving hundreds of participants from civil society organisations, trade unions, research institutions, UN agencies and governments around the world.
The roadmap challenges the idea that economic growth alone can deliver social progress. Instead, it asks what would be needed to build economies centred on human wellbeing, social justice and ecological sustainability.
For the Tax Justice Network, the launch of the roadmap marks the culmination of a process we have been part of since 2024.
Our involvement began when the UN Special Rapporteur on Extreme Poverty and Human Rights launched a call for inputs on eradicating poverty in a post-growth context.
In our 2024 submission, we argued that discussions about poverty cannot be separated from questions of tax abuse, wealth concentration and governments’ ability to raise revenue.
In 2025, we contributed again through a second call for inputs. This time, we focused on what tax justice looks like in a post-growth economy, including the role of corporate taxation and the unequal distribution of taxing rights between countries. We joined hundreds of organisations, researchers and advocates in contributing to the roadmap’s development from different areas of work and expertise.
Over the following year, the roadmap evolved through consultations, exchanges and discussions involving organisations working across a wide range of issues, from labour rights and social protection to climate justice and human rights.
In April, many of those contributors gathered in Geneva for the roadmap’s launch conference to reflect on the process and discuss the next steps.
One thing that stood out throughout the consultation process was how often discussions about poverty led to questions about public revenue.
Participants approached the conversation from very different perspectives – social protection, labour rights, public services, care work, climate action and human rights. Yet many of these discussions returned to a common challenge: how can governments reduce poverty and inequality if they lack the resources needed to invest in people?
For the Tax Justice Network, that question inevitably leads to tax.
Every year, governments lose an estimated US$492 billion to tax abuse by multinational corporations and wealthy individuals. These are resources that could otherwise be invested in healthcare, education, social protection and other measures aimed at reducing poverty and inequality.
Governments are currently negotiating a UN Framework Convention on International Tax Cooperation (UFCITC), which could reshape the global rules that determine where profits are taxed and who gets to tax them.
While the roadmap focuses on poverty eradication and the convention focuses on international tax cooperation, both processes raise related questions about economic governance, inequality and governments’ capacity to act. How can countries secure the revenues needed to fund public services? How can they curb cross-border tax abuse? And how can international rules better reflect the needs and priorities of all countries, particularly those that have historically had less influence over global tax rule-making?
The roadmap will be presented to the Human Rights Council on June 25, 2026. In addition, a series of policy briefs will now explore different aspects of the roadmap in greater depth. One of these, written by the Tax Justice Network and due to be published later this month, focuses on corporate taxation and the role it can play in supporting poverty reduction and more equitable economies.
Together, these briefs will deepen the evidence base underpinning the roadmap by exploring how different policy domains can contribute to a post-growth transition. By linking broad principles with concrete policy measures, they aim to support informed debate and help identify pathways towards more equitable and sustainable economies.
As this work move forward, we also welcome the appointment of Ms Elena Carolina Díaz Galán, as the new Special Rapporteur on Extreme Poverty and Human Rights. We look forward to continuing to support this agenda and helping hold governments and institutions accountable for the delivering the commitments needed to tackle poverty and inequality.
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Picture the scene. It’s August in New York and international negotiators are meeting to continue moves to ensure that multinational companies are finally required to pay taxes according to where their real economic activity takes place.
Only one country is missing from around the table – the United States. Despite physically hosting the discussion, the Trump administration refuses to participate in the talks that will define the UN Framework Convention on International Tax Cooperation.
This is part of a pattern. After coming to power in 2025, the administration upended everything that had been negotiated at the OECD since 2019. First they vetoed ‘pillar one’ of the agreement, and then they demanded an exemption from most of ‘pillar two’ – which was largely designed by the US to begin with. Now the negotiations have moved to the UN, and the US is being left behind.
When combined with the deeply damaging Tax Cuts and Jobs Act passed by the first Trump administration, the result is that US multinationals are now shifting twice as much profit out of the countries where they do business.
But don’t imagine that the US is benefiting. On the contrary, those multinationals are paying even less tax to the US than they did before. Don’t think that foreign multinationals are lining up to pay tax either – when in Rome, after all. Nor has the US gained any jobs from giving away the farm – so pretty much everyone is a loser.
That includes US states, who typically base their state-level corporate income tax on whatever the US administration accepts at federal level, adjusted for the state’s share of the multinational’s real (US) economic activity. So as the second Trump administration again lets multinationals, US and foreign, walk all over their tax obligations, that laxness deprives the states of revenue too.
And this is where California is stepping up.
The US states, just like the provinces of Canada and the cantons of Switzerland, among others, use a taxing method known as formulary apportionment to determine their corporate taxes. A multinational’s total profits are added together and then distributed to states according to the share of its economic activity taking place there. Each state is then allowed to tax the share of profits that fits its share of the multinational’s employees, assets, or sales. For instance, if half of the employees and half of the sales are happening in California, California would be allowed to tax half of the profits.
The key point is to make sure that companies pay where they play – rather than making their profits in one place, but declaring them somewhere else for tax purposes.
The reason to rely on this formulary apportionment method is that the basis of international corporate tax rules – the arm’s length principle – is unfit for purpose. This approach allows multinational groups to set ‘transfer prices’ for the exchange of goods and services between sister companies, as if they were operating independently (at arm’s length from one another). Inevitably, multinationals succumb to the temptation to manipulate these transfer prices in order to shift the group’s profit into entities in other jurisdictions where they will pay little or no tax. This allows companies to pay where they say the profits are, instead of where they actually arise.
The growing importance of intangible assets such as corporate brands and intellectual property, and the more recent phenomenon of digitalisation, has made it increasingly difficult for tax authorities to challenge abusive transfer prices. The result is that the scale of profit ‘misalignment’ – the share of multinationals’ profits that are declared where they say, instead of where they play – has rocketed. Back in the early 1990s, around only 5% of the global profits of US multinationals were misaligned in this way. That doubled within the decade and continued to rise ever since, reaching 20% by the 2010s and an average of 24% for 2016-2021 – supercharged by the Tax Cuts and (No) Jobs Act.
The current Trump administration’s recent changes, and undermining of even the limited OECD reforms, have further exacerbated the problem. Major US tech companies now pay tax at effective rates that are barely into double digits. Pharma companies and others channel vast profits through Switzerland, Ireland, Puerto Rico and Singapore.
That’s why the countries of the world, with the exception of the refusenik Trump administration, are now negotiating on a UN tax convention that would commit to allow all states to exert taxing rights over economic activity in their jurisdiction. This lays the base for the subsequent Conferences of the Parties to agree a formulary apportionment approach – an approach that may already be embedded in the protocol for taxing crossborder services which is being negotiated alongside the convention.
The state of California is now pioneering the approach in the US. At present, and like a number of US states, California offers companies an election: for the apportionment of tax base that underpins their state tax liability, they can either be assessed on their declared US profit, or they can elect to be assessed on the appropriate share of their global profit. To the extent that the US share of profits has historically been less than its share of economic activity, it has almost always been cheaper for multinationals to pay state tax on the basis of their US profits – and so they elect for ‘water’s edge’ option, where the assessment stops at the US border.
California’s proposed legislation, AB 1790, would end this election and require companies to be assessed on the unitary basis – according, that is, to the global profits of the whole group, rather than the claimed US profits only. This would mandate ‘Worldwide Combined Reporting’ (WWCR). That is, companies would have to report the global activity and profits of their group.
If the legislation passes, California will cut through the abuses of the arm’s length principle and simply tax multinationals according to California’s fair share of each group’s global economic activity. This will not only point the way for other US states to follow, but also aligns with the direction of travel for negotiators at the UN: away from the obsolete arm’s length principle, and towards a system of taxing rights based on the location of real economic activity.
As this new future of corporate taxation comes ever more closely into view, California’s policymakers are weighing up their opportunity to end the loophole of the water’s edge election and mount a powerful defence of their tax base.
Thinking of the questions that policymakers might have, we’ve put together a Q&A based on close engagement with expert allies. The full text is below, or you can download a pdf.
Q1. How do multinational companies use profit shifting to avoid US state taxes?
In US states, a corporation’s income tax base essentially begins with its federal tax base. That means that the offshore profit shifting that drains the federal tax base drains the state tax base as well. Profit shifting schemes take different forms, many incredibly complex and intentionally opaque. Often, they are engineered by creating paper transactions among artificially manipulated legal entities, typically in the types of jurisdictions that top our Corporate Tax Haven Index – while the real economic activity that produced those profits never moves at all.
Q2. Do traditional anti-abuse rules eliminate state tax avoidance?
No. Traditional anti-abuse rules still rest on the legal fiction that the prices for internal transactions in a multinational group, including of subsidiaries transacting with their controlling parent, can be set as if they were independent equals operating at ‘arm’s length’ from each other in a free market. This absurdity allows multinationals great leeway in practice to manipulate these transfer prices in order to make sure the profit from economic activity in one place, is declared in a much lower-tax jurisdiction elsewhere.
Q3. How does WWCR end multinational state tax avoidance?
Worldwide Combined Reporting (WWCR) ends multinationals’ state tax avoidance by taxing them based on economic reality instead of on embarrassing fictions. When a commonly controlled group of affiliates are functionally integrated and mutually interdependent, as virtually all multinationals are, then WWCR treats them all as a single taxpayer. It requires complete reporting of the entire group’s profits, everywhere. Then, to determine what portion of those profits the state may fairly tax, it uses a standard “apportionment formula” (for example, the group’s in-state share of its worldwide sales and employment).
Under WWCR, the entire group’s worldwide profits are in the tax base, so shifting profits around the group achieves nothing. And corporate state-tax avoidance disappears.
Q4. Does WWCR have any impact on corporate location decisions?
Under WWCR, corporate relocation threats are hollow. The cost and disruption of relocating significant operations out of state can be enormous. Such decisions are based not on marginal increases in tax costs but on access to infrastructure, resources, trained workers, and customers. And, in the majority of states that apportion taxable profits by sales alone, relocation would not avoid a single dollar of tax.
Furthermore, no executive could credibly justify, to shareholders, the decision to abandon a profitable market over the end of an unfair tax advantage. If anything, WWCR improves the business climate: it levels the playing field for local small and medium-sized businesses that do not have shell companies in offshore tax havens. And this is crucial: by ending the unfair tax advantage that multinationals have over the smaller, local businesses that typically provide the bulk of employment and economic dynamism, WWCR is a fundamentally pro-business measure.
Q5. Why will corporate owners, not customers, be impacted by WWCR?
WWCR’s economic incidence falls on those who actually pocket the profits — shareholders and senior executives — not consumers. The multinationals that will pay more under WWCR are not businesses competing on thin margins; they are the giants whose profits flow from market dominance, valuable intangibles, pricing power… and tax avoidance. Economic research consistently finds that this windfall — what economists call “supernormal profits” or “excess rents” — accrues to corporate owners, not customers. In fact, some research shows that where multinationals have engineered lower effective tax rates, even shareholders do not gain – they appear to receive no higher return, but they do end up taking on greater risk because the shares of aggressive tax-avoiders become more volatile. Customers never share the upside when these corporations book outsized profits. They will not bear the downside when WWCR captures part of those profits as state tax.
Q6. What ensures that WWCR taxes only those profits attributable to each state?
Two long-established principles ensure that each state taxes only its fair share. The “unitary business principle” treats an integrated and interdependent multinational corporate group as the single enterprise that it is in the eyes of management and financial regulators. “Formulary apportionment” then calculates the state’s fair share by an objective formula — for example, its share of the group’s worldwide sales, employment, etc. Picture the group’s worldwide profits as a pie: if 2 per cent of the group’s worldwide sales are to in-state customers, and 2 per cent of the group’s employees work there, the state’s slice is 2 per cent of the pie. That slice reflects in-state economic activity, not foreign profits. There is no double taxation.
The US Supreme Court has confirmed that WWCR, operating this way, does not tax “extraterritorial values.” And that makes sense, because if every state and every country took this same approach, the tax base would be precisely defined and apportioned among the different jurisdictions. No profits would be taxed in two different places; and no profits would be left entirely untaxed.
Q7. Is the legality of WWCR firmly settled?
Yes — and twice over. The US Supreme Court has upheld WWCR in Container Corp. v. Franchise Tax Board (1983), as applied to a US-based multinational, and again a decade later in Barclays Bank PLC v. Franchise Tax Board (1994), as applied to foreign-parent multinationals. Both decisions rest on principles of state taxing power and federalism that have remained stable across changes in the Court’s composition.
Q8. Is WWCR consistent with current global aims to stop tax avoidance?
Fully consistent. Article 5 of the draft United Nations Framework Convention on International Tax Cooperation being negotiated today shares the goals of WWCR, indicating that each countries’ taxing rights should be tied to the economic activity that they host. Also, for more than a decade, foreign governments have worked with the OECD on the Base Erosion and Profit Shifting (BEPS) initiative and its successor framework, Pillar One and Pillar Two. Both efforts expressly recognize the serious harm aggressive corporate profit shifting causes to public revenues worldwide.
The multilateral convention to implement Pillar One has been vetoed for now by the Trump administration, but the US was a party to the agreement and the process by which Pillar One developed the technical basis to apply unitary taxation for the first time within OECD rules. Pillar Two was intended to apply a minimum rate of tax on the profits of multinationals, in whichever country they were declared. The Trump administration has also undermined this by insisting on exemptions from key elements for US multinationals – freeing them of any constraint on profit shifting. Nonetheless, the expressed intentions to ensure multinationals pay fair tax rates, and are taxed in the places where they carry out their economic activities, are well established. No foreign government can credibly retaliate against a US state for adopting a policy aligned with the international consensus that government itself helped build.
Q9. Do powerful global corporations have the resources to comply with WWCR?
Yes — abundantly. Under the WWCR Model Statute, only corporate groups with $1 billion or more in annual revenues are required to use WWCR. These huge multinational corporations already maintain comprehensive worldwide financial data for consolidated reporting under securities laws, federal corporate minimum-tax obligations, and a growing set of international transparency standards. They already devote enormous resources to designing the complex schemes by which they shift profits in the first place; the additional work to comply with WWCR is modest by comparison.
Q10. Will revenue department enforcement of WWCR ultimately be easier?
Yes — after a reasonable start-up period. WWCR replaces the never-ending chase to identify and untangle complex profit shifting schemes with a combined report and an objective apportionment formula. There is one corporate group, one set of worldwide books, and no transfer-pricing dispute to relitigate year after year. State revenue departments can build the necessary expertise within a normal lead-in period — typically a year — by training auditors, hiring international-tax specialists, and updating systems. The expertise is widespread: Alaska has mandated WWCR for oil-and-gas corporations for decades, and a number of other states already audit elective WWCR filings with success.
Q11. How is WWCR’s modern revival grounded in history?
Solidly. By the early 1980s, twelve US states had adopted mandatory WWCR and successfully defended it in the US Supreme Court. This closed the profit shifting loophole for large multinational tax avoiders, who reacted by pressuring the UK’s Thatcher administration to press the Reagan administration to demand that the states retreat. WWCR was abandoned not because it failed, but because Washington forced the states’ hand.
No such pressure campaign could work today, when the problem of profit shifting by aggressive global corporations is widely understood and condemned – including by the UK public. States revisiting WWCR are returning to a tested, court-affirmed framework on far stronger ground than four decades ago.
Q12. Why is California the heart of WWCR’s revival?
California is the birthplace of Worldwide Combined Reporting. The unitary business principle on which WWCR rests was forged largely in the state’s tax cases before the US Supreme Court. In the early 1980s, California became the first state to mandate WWCR. Four decades later, in 2026, the state again leads: a bill based on the widely respected WWCR Model Statute passed favourably out of the Assembly Revenue and Taxation Committee — the first WWCR bill to clear any California legislative committee in more than 40 years, and a development closely watched in other state capitols. With the global momentum to ensure taxing countries’ rights are aligned with their share of multinationals’ economic activity, California is set to lead nationally on an issue where the US administration has simply vacated its role.
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The Tax Justice Network has banged the drum about the threats posed by trusts for decades. On 21 May 2026, the European Court of Justice has finally joined us. They have published rulings that directly relate to trusts regarding two major risks: secrecy and asset protection. As we set out below, these represent a significant step against the widespread abuse of trusts, and we urge authorities across the European Union to take action now.
In the first case, the European Court of Justice simply confirmed that access to information on a trust’s beneficial owners based on a ‘legitimate interest’ is good enough. This is by no means radical, and it does not “undo” the disaster of the infamous European Court of Justice ruling of 2022 which invalidated public access to beneficial ownership information by upholding the weaponisation of privacy. Since then, many more EU countries have closed their public registries and others (e.g. British secrecy jurisdictions) have abolished plans to go in that direction.
Recognising access to trusts’ beneficial owners based on a legitimate interest was already contemplated in the EU anti-money laundering directive of 2018 (known as AMLD 5). It was then developed further under EU AML Package of 2024. The unfortunate European Court of Justice ruling of 2022 also admitted this access to beneficial owners of legal persons based on having a legitimate interest. In 2026, the European Court of Justice simply confirms that it also applies to trusts. As reported by the press release:
“laying down public access to beneficial ownership information, provided there is a legitimate interest, is compatible with the rights guaranteed in Articles 7 and 8 of the Charter of Fundamental Rights of the European Union. According to the Court, by that legislation, the EU legislature is pursuing a legitimate and important objective, namely, the prevention of money laundering and terrorist financing through increased transparency, in accordance with the principle of proportionality.”
What is much more relevant, however, is the blow to trusts for asset protection and sanction circumvention. These cases referred to sanctioned individuals trying to escape sanctions by putting assets into discretionary trusts and being removed as protectors or beneficiaries.
The Tax Justice Network has been warning of the risks of asset protection through the “ownerless limbo” created by trusts, whereby settlors and beneficiaries claim not to own or control the assets, but are still able to enjoy them and regain access to them, when the “coast is clear” from tax authorities, sanctions or creditors.
Now, the European Court of Justice agrees with us with some remarkable understanding of how flexible and sneaky trusts can be. As described by the European Court of Justice press release:
This means that assets can be regarded as belonging to or being under the control of the settlor or the beneficiary of a trust, where those persons have power to use, benefit from or dispose of those resources or to have influence over them and over the decisions made by the trustee in relation to them…
In that regard, indications that assets belong to or are controlled by the beneficiary or the settlor may be inferred from factual circumstances3 or from the presence of needlessly complex legal structures.4
3 The relevant factual circumstances concern the relationships between the beneficiary or settlor and the other persons involved in the trust, and the allocation of the economic resources in the trust to activities intended primarily, even if indirectly, for the beneficiary or the settlor.
4 Such indications include the fact that the beneficiary or settlor holds a majority of the capital of or voting rights in the trustee; the fact that certain entities are set up or change their identity shortly before sanctions come into force; and the relationships between the director of the companies subject to freezing measures and the beneficiary or settlor.
The European Court of Justice ruling quotes remarks from the Italian court (that referred the case to the European Court of Justice) which offers even juicier understanding of the shenanigans created by trusts.
First, if a person really wanted to completely transfer an asset, they would donate it to someone else. If instead they put it into a trust, then they want to keep some control over it. This is especially true, even if the trustee is fully independent (aka not the settlor or its spouse or brother), as the trustee would have the settlor’s interests in mind:
“This contribution [to a trust] would not have the effect of definitively severing the link of ‘ownership’ between the assets contributed to the trust and the settlor, who would objectively be able to exercise substantial influence over them. Such influence would stem from the possibility of recovering formal ownership of those assets in the event of early termination of the trust or refusal by the beneficiaries to accept the transfer of those assets, as well as from the fact that, by establishing the trust and entrusting its management and control to persons in whom the settlor has confidence and whom the settlor has chosen, the settlor would be able to guide in advance its use and final destination…
take into account the relationship between the settlor, on the one hand, and the other persons involved in the trust, such as the trustee or the protector, on the other hand, and determine, in particular, whether the settlor has appointed, in the role of trustee or protector, persons of trust, linked by professional or personal ties to the settlor, who are likely to follow the instructions or suggestions of the settlor regarding the administration of the trust and its assets.”
Second, the Italian court proposes the same rule that we proposed back in 2017. Whenever taxes, unpaid debts or sanctions are concerned, assets put in a trust should be considered belonging to the settlor (because they are otherwise in an ownerless limbo), until they are effectively distributed to third-party beneficiaries:
“a trust, at least until the assets contributed to it are definitively allocated to third parties, would constitute an easily usable mechanism for circumventing the measures for freezing funds and economic resources provided for by Union law”
Third, because trusts are usually not registered, let alone published, trust documents can be amended or backdated, so it makes little sense to give too much value to the current text of a trust deed. More importantly, this same flexibility can be abused to undermine the law:
“in determining whether the settlor “controls” the assets contributed to the trust, it would be irrelevant that, under the trust deed, during the period of validity of the trust, for ordinary or extraordinary reasons, the persons responsible for administering the trust, in particular the trustee or the protector, may change, since the persons who may eventually be called upon to replace them will act under the rules established by the settlor in the trust deed…
This dissociation, as well as other characteristics of the trust, namely the private nature of this mechanism, the ease and flexibility of its creation and modification, which can lead to the opacity and structural complexity of such a mechanism, allows its use not only for legitimate purposes, but also to conceal the link that the settlor maintains with the funds and economic resources contributed to the trust…
Indeed, since the trust deed and its amendments are not subject to the obligation of publicity, identifying the true nature of the legal relationship covered by this mechanism on the basis of this deed can prove difficult, since the versions in force of this deed and its amendments may not be made available and are, in any case, liable to be modified.”
Fourth, courts and authorities should look beyond the nominee or trustee appearing as the registered owner, but instead check who is really in control:
“the notion of ‘ownership’ must be interpreted as covering not only situations in which such power over the funds and economic resources concerned can be legally attested, but also situations in which a person or entity actually possesses this power, despite the fact that, legally, the holder of said power is another person or entity.”
Fifth, just as courts in India considered the circumstances of using trusts and secrecy jurisdictions like the Cayman Islands, courts should always consider the governing law of the trust, in this case of Bermuda:
“the trust at issue in the main proceedings is constituted and governed by the law of Bermuda… take into account the prerogatives conferred by that law on the settlor, such as the power to revoke all or part of the trust, the power to give binding instructions to the trustee concerning the purchase, holding, sale or other commercial or investment transactions relating to trust property, or concerning any investment or reinvestment of such property, as well as for the purposes of exercising any power or right arising from such property, the ability to appoint, add, remove or replace any trustee or protector of the trust, the ability to add, remove or exclude a beneficiary or a class of beneficiaries, and the ability to decide to be a joint beneficiary of the trust.
These prerogatives could indicate that the settlor has influence over the funds and economic resources contributed to the trust or over the choices made by the trustee with regard to these funds and economic resources, whether these prerogatives are explicitly provided for or not in the trust deed or its amendments.”
In conclusion, the European Court of Justice is finally agreeing with what we have been saying for years. Rather than just being “private family matters”, trusts can have a crucial role and be abused to engage in money laundering, sanction circumvention and many other illicit financial flows. While trust transparency is still limited to those with a ‘legitimate interest’, at least the flexibility, ownerless limbo and asset protection features of trusts are at last being challenged to ensure that individuals cannot simply escape the law by hiding and confusing their control over assets through the use of trusts.
We welcome the European Court of Justice rulings, and urge tax authorities and law enforcement to ensure this approach is now rapidly turned into practical action to combat the many abuses.
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From July 2027, obliged entities will be required to take financial secrecy risks into account in geographic risk assessments under the European Union’s anti-money laundering rules. This marks a significant development: a long-standing insight that secrecy is not incidental but central to economic crime is finally being translated into regulatory practice. The way risk is defined shapes where scrutiny is directed, which financial flows are prioritised, and ultimately whether illicit activity is detected or missed.
The data reflects this clearly. Jurisdictions with higher levels of financial secrecy consistently present greater opportunities for illicit financial flows to be concealed, particularly where large transaction volumes intersect with weak transparency requirements.
For years, the role of financial secrecy has been widely acknowledged but unevenly addressed. It has appeared across guidance and research, yet rarely as a structured and measurable component of risk assessment. By requiring institutions to account for it explicitly, the EU’s new framework begins to close that gap and to align regulatory expectations more closely with how illicit financial flows actually operate.
At its core, financial secrecy is embedded in legal and regulatory systems that determine whether financial activity can be traced, scrutinised or concealed. Weak beneficial ownership transparency, barriers to information exchange, and gaps in oversight do not simply increase risk at the margins; they shape the environments in which illicit financial activity becomes possible.
Where financial secrecy persists, it enables tax abuse, corruption and the concealment of wealth at the expense of public revenues and accountability.
Anti-money laundering frameworks have long relied on country classifications to organise and prioritise risk, most notably through “high-risk” and “low-risk” lists and politically shaped ‘blacklists’. The term “blacklist” itself reflects a problematic and racialised framing, which sits uncomfortably with its disproportionate application to countries in the Global South. These approaches have provided a degree of operational clarity, but they have also tended to compress complex realities into rigid categories. In practice, this has meant that risk is often treated as a binary condition — something a jurisdiction either is or is not — rather than something that varies in degree and is shaped by underlying legal and institutional features.
The effect is not only simplification, but distortion. When risk is reduced to categories, it becomes easier to overlook how similar conditions can produce similar vulnerabilities across very different jurisdictions. It also allows some risks to remain under-scrutinised, particularly where they sit outside established classifications. In practice, this has contributed to systems that generate large volumes of low-value alerts while missing higher-risk activity, with false positive rates in some cases exceeding 90 per cent.
Recent analytical work and financial flow data raise serious concerns about the continued reliance on blacklisting as a core tool in anti-money laundering frameworks. Evidence shows that suspicious (unexplained) financial flows to and from major international financial centres — often not included on official high-risk lists — have grown significantly, while there is no evidence that flows to blacklisted jurisdictions have.
This suggests that blacklists can be not only ineffective but actively misleading, directing attention away from where risks are most concentrated. In practice, this creates a false sense of security and reinforces biases that disproportionately target smaller or lower-income jurisdictions, while overlooking systemic risks embedded in major economies.
This pattern reflects a broader structural issue: when risk identification is shaped by political processes rather than empirical evidence, enforcement efforts risk focusing on visibility rather than materiality. As a result, compliance systems may expend significant resources on jurisdictions with limited relevance to global illicit financial flows, while under-scrutinising the financial centres through which the largest volumes of potentially illicit capital move. This not only reduces effectiveness, but also risks discriminating against groups of citizens and entire countries. The racist origin of the term ‘blacklist’ makes it an unfortunately fitting label for a practice that is itself frequently discriminatory.
The introduction of financial secrecy as a geographic risk factor reflects a shift towards assessing the underlying drivers of risk, rather than relying on broad country labels. It directs attention towards the specific conditions that enable opacity, opening space for more granular and proportionate assessments that allow institutions to distinguish more clearly between different levels of exposure and risk.
This development builds on a body of work that has long argued for understanding financial secrecy as something that can be measured rather than assumed. Since its first publication in 2009, the Financial Secrecy Index has evaluated 141 jurisdictions using 20 indicators covering asset and ownership registration, legal entity transparency, tax and regulatory integrity, and international cooperation. Each jurisdiction is assigned a secrecy score on a scale from 0 to 100, allowing risk to be assessed in degrees rather than categories.
By incorporating measurable, data-driven secrecy indicators into risk assessment, institutions are better able to distinguish between environments where financial activity can be scrutinised and those where it can more easily be concealed. The result is not only more accurate detection, but more effective use of compliance resources, including by reducing unnecessary alerts and focusing attention on higher-risk activity.
However, understanding where risk is highest also depends on scale.
A consistent finding across multiple data sources is that illicit financial flows and money laundering risks are highly concentrated within the global financial system. Major financial centres and advanced economies host the bulk of financial activity, and therefore also represent the primary nodes through which illicit funds are processed.
This concentration underscores a critical point for risk assessment: evaluating risk requires not only qualitative judgments about regulatory frameworks, but also quantitative analysis of where financial flows — and therefore exposure — are greatest.
Approaches that rely primarily on qualitative, rules-based assessments without integrating scale and volume risk overlook systemic vulnerabilities. In a context where a small number of jurisdictions account for a disproportionate share of global financial activity, treating all countries as equivalent units of analysis is neither efficient nor effective.
A more accurate approach requires combining legal and institutional assessments with data on financial flows, investment stocks, and market size to ensure that risk prioritisation reflects real-world exposure.
Systematically integrating quantitative dimensions into AML risk frameworks, rather than operating with discretionary risk parameters, would help shift the focus towards the ‘big nodes’ of the global financial system — where both legitimate and illicit financial activity is most concentrated. At the micro-level, large transactions should attract a relatively higher level of scrutiny than smaller ones.
The formal recognition of financial secrecy as a core risk factor represents clear progress. It reflects a growing alignment between research, policy and regulatory practice, and it signals that more nuanced approaches to risk are both possible and necessary.
These approaches are already embedded in established frameworks. Financial secrecy indicators form a core component of the Basel AML Index and are recommended by international law enforcement initiatives, including the FBI and the Five Eyes intelligence alliance, when assessing corruption risk.
At the same time, it exposes a deeper question about consistency and responsibility.
The responsibility to act on financial secrecy now sits squarely with obliged entities. Institutions are expected to integrate new data, adapt their systems, and demonstrate that their risk assessments are both effective and defensible, with increasing emphasis on transparency, documentation and board-level accountability.
This approach is now entering a phase of formalisation. The EU Anti-Money Laundering Authority is expected to issue detailed guidance on risk factors by July 2026, following a public consultation process that will shape how financial secrecy is incorporated going forward.
At the same time, the environments that give rise to financial secrecy are created and sustained through deliberate public policy choices. Decisions about transparency, enforcement, and international cooperation are made by governments, shaping where and how financial secrecy persists.
Crucially, in many cases, the jurisdictions most deeply embedded in global financial secrecy are also those with the greatest influence over how risk is defined and applied.
Recognising financial secrecy as a risk factor therefore cannot stop at the level of private sector compliance. It also requires holding public policy frameworks to the same standard, rather than limiting responsibility to the institutions managing the risks.
If financial secrecy is to be treated as a core component of risk assessment, the same logic must be extended more widely. This means examining how domestic legal and regulatory frameworks contribute to secrecy, identifying where gaps persist, and addressing those conditions directly. It also requires a more consistent approach to how risk is understood across jurisdictions, acknowledging that existing classifications have often reflected political considerations as much as objective criteria.
A shift towards more granular, evidence-based approaches offers an opportunity to build a more accurate picture of how financial secrecy contributes to global risk. Realising that potential will depend on how broadly and consistently this approach is carried through.
The EU’s new rules demonstrate that financial secrecy can no longer be treated as a peripheral concern within anti-money laundering frameworks. They show that progress is possible when regulatory systems begin to reflect the realities of how financial flows operate.
As these expectations begin to be put into practice, financial secrecy will increasingly shape how institutions understand and prioritise risk. The question is no longer whether it should be incorporated, but how quickly and effectively it can be integrated into existing frameworks in a way that is both workable in practice and capable of withstanding supervisory scrutiny.
The next step is to ensure that this progress does not stop at the level of compliance.
Applying the same standard across public policy frameworks would move the conversation from managing the effects of financial secrecy to addressing its causes. That is where the full potential of this shift lies, and where its impact will ultimately be determined.
More detail on using financial secrecy data in anti-money laundering frameworks, including the regulatory context and available datasets, is available on our dedicated microsite.
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This blog is a summary of the Tax Justice Network’s most recent stakeholder submissions regarding the ongoing negotiations of the United Nations Framework Convention on International Tax Cooperation.
After four sessions of (sometimes heated) warm-up, the negotiations of the Convention are now entering into ‘crunch time’. Over the summer and in anticipation of the Fifth Session of negotiations in August, all three workstreams are expected to deliver new draft text of parts of the Convention and its early protocols.
For Workstream 1, the new text is expected to be a reworked version of the formulation of the Framework Convention’s ‘commitments’ based on the discussions in the Fourth Sessions and the subsequent inputs received.
For Workstream 2 and 3, the expected text will be the first tangible output of the two ‘simultaneously negotiated protocols’ of the Convention.
Below, we summarise the main elements of our recent stakeholder inputs.
More information and background on the Convention can be found at our UN Tax Convention Hub.
Based on the latest Workstream 1 Draft and the subsequent discussions during the Fourth Session, we have raised the following points in our stakeholder submission.
Generally speaking, we believe that the commitments should combine ambition, flexibility and cooperation with respect for sovereignty. Commitments should set the direction of travel for future work under the Convention while leaving technical detail to protocols and other conference of parties (COP) decisions.
Regarding the formulation of the individual commitments, we note the following:
Our full submission on Workstream 1 can be accessed here.
Based on the latest Workstream 2 Concept Note and the subsequent discussions during the Fourth Session, we have raised the following points in our stakeholder submission:
Our full submission on Workstream 2 can be accessed here.
Based on the latest Workstream 3 Concept Note and the subsequent discussions during the Fourth Session, we have raised the following points in our stakeholder submission:
Our full submission on Workstream 3 can be accessed here.
Tax is never neutral. It tells us whose wellbeing is protected and whose dignity is treated as negotiable. Around 500 million women and girls worldwide lack the facilities needed to manage menstruation safely. In too many countries, the products required to bridge that gap are still treated as taxable commodities, folding gender inequality into the architecture of public finance.
Ethiopia’s decision to charge a 15 percent value-added tax (VAT) on menstrual products, a flat levy paid by rich and poor alike and layered on top of import duties, shows exactly where women’s health sits in the hierarchy of fiscal priorities.
VAT is the country’s workhorse tax, collected from households regardless of income. When a system relies this heavily on regressive consumption taxes, those with the least end up paying the most, proportionally, because lower-income households must spend a larger share of what they earn simply to get by. Taxing menstrual products compounds that imbalance.
In reality, the revenue raised from menstrual products is a rounding error. Ethiopia loses far more to practices by corporations and wealthy elites that quietly drain public coffers. Illicit financial flows alone swallow an estimated 10 to 30 percent of government revenue each year. Multinational profit shifting, where companies report profits outside Ethiopia instead of where real economic activity occurs, costs the country more than US$1.1 billion annually.
The contrast matters. Capital faces no such restraint. Investors who expand production can secure full income tax relief and customs duty exemptions. Many sectors enjoy years-long tax holidays, with exporters granted even more. When the state wants to make something affordable for powerful actors, it knows exactly how to do it.
What is spared at the top is recovered in the price of everyday goods. When menstrual products are priced out of reach, only a minority of women and girls can afford to use them consistently. Others are pushed toward rags, newspapers, or ash-filled cloths out of necessity, putting their health in jeopardy.
This is the price of political convenience: instead of confronting systems that drain billions, the burden is passed onto women and girls.
Period poverty is widespread. In Ethiopia, particularly in rural areas, menstruation remains a barrier to school attendance. UNESCO estimates that one in ten girls in sub-Saharan Africa misses school during her period. Over time, losing days of learning each month compounds, narrowing girls’ educational and economic futures.
This is not simply a health or education issue. More broadly, the taxation of menstrual products reveals how social reproduction is treated in Ethiopia. The labour of caring for children, preparing food, supporting elders and sustaining households is essential, yet it is widely assumed to be women’s responsibility alone. This invisible work underpins the entire economy, but it remains largely absent from national economic planning.
Tax policy makes that invisibility concrete. The state under-taxes capital while taxing the goods women need to manage both their households and their own bodies. In periods of conflict, displacement, inflation and rising debt obligations, women are expected to stretch their labour even further, absorbing economic shocks without protection or compensation. When menstrual health is taxed, it reinforces a fiscal logic that treats women’s unpaid labour as an inexhaustible resource, available to subsidise public shortfalls.
Ethiopia already makes clear decisions about which goods are too essential to tax. In July 2025, the Addis Ababa Revenue Bureau removed value-added tax on unprocessed vegetables such as onions and potatoes to ease household food bills during a period of high inflation. Officials framed the move as necessary relief for consumers facing rising prices.
Yet menstrual products, which are just as essential, remain fully taxed.
This reflects a wider pattern. Ethiopia relies heavily on value-added tax, a consumption tax paid at the point of purchase, to fund its budget. In 2023–24, VAT collections exceeded 200 billion birr, making it the single largest source of tax revenue. Taxes on income, which rise with earnings, raised roughly half that amount. When a tax system depends more on what people buy than on what they earn, households with the least income end up paying a larger share of their resources in tax, simply because they have little room to save. That dependence is reinforced by generous tax incentives and preferential treatment for large firms, including multinationals, which drain revenue at the top and leave consumption taxes to do the fiscal heavy lifting.
A standard defence of VAT systems holds that exemptions create complexity, and that a uniform rate is more efficient, with revenues later redistributed to offset harm. In theory, that argument rests on the existence of effective public transfer schemes. In practice, no such mechanism exists in Ethiopia to guarantee that women and girls who cannot afford sanitary products will be compensated. Designing and targeting a separate cash transfer programme would be more administratively complex than simply removing VAT at the source.
Even if those practical hurdles were resolved, the case would remain unconvincing. The revenue gained from taxing menstrual products cannot justify the cost imposed on dignity, health and participation. In this case, the efficiency argument collapses under the weight of its own assumptions.
Removing tax from menstrual products would simply extend a principle Ethiopia already applies: when a good is essential to daily life and taxing it harms those with the least, the tax can be lifted. Ethiopia already adjusts its tax system when it recognises that a product matters for public wellbeing. What is missing is the political decision to treat menstrual health in the same way.
Kenya took a groundbreaking step in 2004, becoming the first country in the world to remove VAT on menstrual products. Since 2017, it has also provided free pads to girls in public schools through a national programme. Rwanda followed in 2019, removing VAT on sanitary pads and supporting local production to improve affordability and access. That same year, South Africa eliminated VAT on menstrual products.
Ethiopia, which often presents itself as a regional leader, is falling behind. It has every opportunity to change course, and the delay has become a form of structural violence, reproduced each month by a tax system that treats women’s needs as expendable.
The debate is not about affordability. Ethiopia loses far more through tax incentives, exemptions and profit shifting than it ever gains from taxing menstrual products. The real question is why a product so fundamental to dignity and health was treated as taxable in the first place. That question exposes a cruel irony: the very bleeding that makes human life possible is treated as fair ground for financing the state.
Abolishing the period tax will not fix everything, but it would mark a necessary departure from a fiscal system that treats women’s biological necessity as a legitimate source of revenue.
Tax policy is a mirror. What does Ethiopia want to see reflected back?
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My mother was the first woman in my family to go to university.
She worked. A lot.
She raised her children alone. She cleaned, cooked and cared. She endured long commutes, low wages and systems that never quite worked in her favour.
I grew up in Brazil, where this was common. In most families around me, it was mothers, grandmothers and aunts who held everything together.
Now, working with colleagues from other parts of the world, I hear stories that sound so similar they feel like déjà vu. Different accents. Different policy settings. Different continents. The same pattern. Women step in where systems fall short. Women compensate for what states fail to provide.
This week, as we mark International Women’s Day, gather at the Commission on the Status of Women, reflect on the follow-up to the Beijing Declaration and Platform for Action and the Bogotá Declaration, I keep thinking about those women.
Because when we talk about women’s rights, we are talking about them. And when we talk about tax justice, we are talking about changing the conditions that shape their and our entire lives.
What Brazil’s tax system means for women
Through the shadow report to the Committee on the Elimination of Discrimination against Women in 2024, in collaboration with Inesc, Latindadd and RJFALC, we examined how Brazil’s tax and fiscal policies affect women’s rights.
Brazil has one of the most regressive tax systems in the world. It relies heavily on indirect taxes, which take a larger share of income from people who earn the least. The households most affected are often headed by women, especially Black women.
These reductions were framed as necessary adjustments, as if they were neutral or unavoidable. But budgets are never neutral. They reflect what a government chooses to prioritise and what it is willing to reduce. While social spending was constrained, tax incentives and exemptions that benefited higher-income groups remained largely intact.
These budget decisions shape whether social support is accessible, whether systems respond and whether women are left to manage alone. For women in lower-income households, the consequences are immediate.
Brazil is not an isolated case
In 2025, we expanded this strand of research in Bled dry, in collaboration with AIDC and CESR. This time we analysed social impacts of tax abuse, illicit financial flows and debt across African countries. The pattern felt painfully familiar. Different histories and institutions, but the same underlying model of revenue loss, debt pressure and weakened public systems.
In parts of Africa, one in five infants miss out on basic vaccines. By adolescence, millions of girls are already out of school. The majority of working women are concentrated in informal employment.
Different countries. Same logic.
Revenue is lost to tax abuse. Debt pressures intensify. Public services weaken. Women absorb the impact across generations.
Why we are mobilising through the Global Days of Action campaign
The global gender gap is projected to take more than a century to close at the current pace. That is far too long to ask women to keep compensating for broken systems. This is why we are part of the Global Days of Action on Tax Justice for Women’s Rights.
This year’s theme, “Tax Justice for the Human Right to Care”, speaks directly to realities many of us recognise. Care is not a private burden to be managed inside families. It is a public responsibility.
Care requires investment. Investment requires revenue. Revenue requires fair taxation.
As the Commission on the Status of Women convenes and we reflect on the Beijing Declaration and Platform for Action, governments are also negotiating the future of international taxation through the UN framework convention on international tax cooperation. Decisions are being made about transparency, taxing rights and whether multinational corporations and the wealthiest individuals will finally pay their fair share. For the first time, these negotiations are unfolding in a space that aspires to broader global legitimacy and inclusivity, with countries from the Global South participating on more equal footing in shaping international tax rules.
Those decisions will shape whether women continue to carry systemic failures or whether states build strong public care systems that redistribute responsibility instead of concentrating it at home.
International Women’s Day is often framed as a celebration. For us, it is also about accountability.
Thirty years after Beijing, we cannot speak about gender equality without speaking about how governments raise and spend money. We cannot talk about empowerment while allowing tax abuse to continue. We cannot demand care without funding it. As negotiations toward the UN tax convention continue this year, this is a once in a generation chance to reshape global tax rules so they support the commitments made to women’s rights decades ago. Tax justice will not solve everything. But without it, gender equality remains underfunded and fragile.
So this week, as movements mobilise, we are clear about what this work means.
It means making taxes work for women.
In Brazil.
Across Africa.
Everywhere.
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This guest blog was written by Nicolás Brennan Hernández, an economist specialising in international trade and political economy. The views expressed are those of the author.
Malta is one of a number of European Union member states that actively undermine their neighbours through the provision of financial secrecy and opportunities for corporate tax abuse. As our Corporate Tax Haven Index shows, Malta has ensured that its headline corporate tax rate of 35% translates for multinationals into an effective tax rate of just 5%. We are pleased to share the following analysis of Malta’s corrupting approach and the challenges it now faces.
This archipelago of 500,000 people, scattered across 316 square kilometres of Mediterranean limestone, hosts €479.7 billion in foreign investment, equivalent to more than 20 times its yearly GDP. Perched in the centre of the Mediterranean, Malta has served as a waystation since Phoenician merchants first recognised its strategic value. It continues this role, only now serving as a convenient stopover for corporate profits fleeing European tax collectors and illicit capital evading oversight.
In a world where the European Union is searching in every nook and cranny for the funds to pay for rearmament, an ageing population, the energy transition, and to compensate those affected by American tariffs and Chinese exports, the matter of taxation and where funds go to avoid it is as important as ever. Jurisdictions that allow corporations to evade taxes are generally frowned upon, but some attract more criticism than others.
As an Irishman abroad in the EU with a passion for policy debates, I have grown accustomed to apologizing for Ireland’s liberal approach to corporate taxation. It is an approach designed to attract hundreds of billions of capital flows, but that isn’t always reflected in average wages. Its Gross National Income (GNI), which looks solely at the income generated on the island, is almost half of its nominal GDP. Yet Ireland attracts disproportionate criticism. Walk down Grand Canal Dock and you’ll find genuine European headquarters. Luxembourg and the Netherlands have proven equally adept at carving profitable niches in the race toward rock-bottom rates. There is, however, a jurisdiction that makes all three look restrained: the Republic of Malta. The country makes Ireland’s GDP iffy statistics look like shoplifting compared to the Louvre robbery.
The numbers are an affront to credulity. Though Malta accounts for 0.1% of EU-27 GDP and population, and is the smallest member state on both counts, its inward FDI stock reached €479.7 billion in December 2024. For context, Spain, with 100 times Malta’s population and nearly 70 times its GDP, hosts €917 billion, less than double Malta’s haul. Against a GDP of roughly €20 billion, that €479.7 billion yields a ratio exceeding 2,300%, compared to the EU average of 48.5%.
Walk through Valletta’s ancient streets, and you won’t find the gleaming towers or bustling headquarters this half-trillion might suggest. This is because the companies exist solely on paper, channeling revenues and assets from other jurisdictions through Special Purpose Entities (SPEs). 98.2% of Malta’s inward FDI and 99.4% of outward flows derive from financial and insurance activities. Even the European Central Bank itself states bluntly that special purpose entities, the companies established on paper in Maltese soil, “dominate external accounts” with “very limited impact on real economic activity.”
At first glance, Malta’s tax regime appears, if anything, burdensome. The nominal corporate tax rate sits at 35%, exceeding Spain (25%), Italy (24%), and dwarfing Ireland’s 12.5%. Yet this façade conceals the mechanism that matters: Malta’s tax refund system for non-residents. While Maltese-owned companies face the 35% rate, those with non-domiciled shareholders pay just 5%, the EU’s lowest effective rate, and less than half of Ireland’s demonised 12.5% rate.
The policy is simple. Companies remit 35% to Maltese authorities, and shareholders then receive tax credits equal to the corporate tax paid. For non-residents, Malta permits refunds of 86% of corporate tax remitted. What began as 35% drops to 5%, and occasionally to zero, for royalties and capital gains. Easy money. Aside from hotels, pharmaceutical companies, and gaming offices, however, the multinational headquarters taking advantage of the regime are nowhere to be seen. Why?
Well, Maltese law doesn’t require physical presence. Under 2019 regulations, companies need only maintain a registered office, hold one annual board meeting on Maltese soil, and retain local records. Directors need not be residents. Staff need not be nationals. Office space can be shared among dozens of entities. The bar for “adequate” presence is nearly subterranean.
Surely someone must supervise the €30 billion that enters and leaves annually? Yes: the firms’ own representatives, of course. In practice, this means the same individual servicing a dozen letterbox companies from a shared Valletta office bears personal responsibility for detecting suspicious patterns in billion-euro flows passing through structures that exist primarily to obscure ownership. The Financial Intelligence Analysis Unit (FIAU) supervises from a distance; day-to-day monitoring rests with professionals whose business model depends on not asking inconvenient questions. For those who missed the 2008 financial crisis or found its lessons on self-regulation insufficiently clear, Malta offers a refresher course. The lack of oversight, alongside a significant online gambling sector, has led the island to develop a reputation for money laundering and “tax optimisation.”
These schemes did not pass unnoticed, however. The consequences arrived in June 2021, when the Financial Action Task Force (FATF) greylisted Malta for strategic deficiencies in combating money laundering and terrorist financing. FATF’s 2019 evaluation found chronic enforcement failures, including that money laundering investigations weren’t priorities, teams lacked resources, and authorities couldn’t investigate financial crimes involving corruption.
The permissiveness surrounding money laundering and corruption would reach a boiling point in 2017. Investigative journalist Daphne Caruana Galizia, whose Panama Papers reporting exposed the “intimacy between big business and politics,” was assassinated by car bomb in October of that year. An official government inquiry concluded the state bore responsibility for creating an “atmosphere of impunity.” The greylisting was a belated acknowledgement that Malta had become a jurisdiction where financial crime flourished under official protection.
The delisting twelve months later proved nearly as controversial. In 2022, FATF declared that Malta had “strengthened its [Anti-Money Laundering] regime,” but some civil society groups were convinced that the progress was meant to assuage FATF’s concerns rather than solve internal deficiencies. Money laundering charges plummeted from 57 in 2021 to 16 in 2023, a decline critics viewed as evidence that reforms “targeted smaller players” while structural issues persisted. More troubling, Maltese courts began overturning FIAU penalties as “unconstitutional,” invalidating hundreds of thousands of euros in fines that had helped convince FATF to delist Malta.
Malta’s National Risk Assessment, published in December 2023 by the very body tasked with improving the country’s reputation, painted a damning picture: only 5% of lawyers and 1% of tax advisors submitted suspicious transaction reports. Advisors handling cross-border planning operated without licensing or fitness checks, and their effectiveness was rated “LOW.” Clearly, while legislation was put in place to improve Malta’s reputation and return capital flows, enforcement remains weak. In spite of it, or perhaps because of it, Malta’s FDI was reaching new heights by 2024.
Malta’s less than thorough approach to financial monitoring was highlighted in its response to EU sanctions following Russia’s invasion of Ukraine. Across Europe, enforcement produced substantial results: Italy seized €143 million, France impounded vessels worth hundreds of millions, and Spain froze assets exceeding €10 billion. In contrast, Malta only identified €150,000 in sanctioned assets, less than the price of a studio apartment. This comes from a jurisdiction that cultivated Russian elites as clients, selling, as recently as 2024, passports to Russian oligarchs with direct involvement in the war in Ukraine, until the EU struck down the law. When a country hosts €479.7 billion in FDI stock, the claim it harbours virtually no sanctioned Russian wealth is highly suspicious. Either Malta’s enforcement proved especially incompetent, or it declined to look where uncomfortable discoveries might lurk.
Defenders might argue Russian capital simply wasn’t a significant share. I would love to verify the claim, but Malta, conveniently perhaps, stands alone among EU-27 members in refusing to report the geographic origin and destination of FDI flows and stocks to Eurostat. While every other jurisdiction publishes detailed breakdowns, Malta’s submissions contain only aggregate totals. This opacity is not oversight but deliberate policy. The ECB notes diplomatically that Malta’s special purpose entities “dominate external accounts,” yet ultimate beneficial owners remain shrouded. Jurisdictions declining to disclose capital sources typically have compelling reasons for doing so.
It is easy to understand Malta’s economic calculus. As intangible as the capital held on the island might be, law offices and financial services firms are thriving, generating high revenues and wages for thousands of workers. The 5% corporate tax rate, while incredibly low by EU standards, helps fund an important share of Malta’s public services, accounting for 21% of government revenue, compared to an EU average of around 10%. Without these arrangements, an island of 500,000 people, devoid of natural resources and with little arable land, would face grim prospects.
Yet economic pragmatism cannot excuse complicity in financial crime. The car bomb that killed Daphne Caruana Galizia in October 2017 illuminated the toxic endpoint of a state captured by interests it’s meant to regulate. Her murder revealed the logic underpinning Malta’s business model: when prosperity depends upon not asking difficult questions about capital flows, those who insist on asking become existential threats.
Moreover, not only is this arrangement morally questionable, but it is far from sustainable. The OECD’s Pillar Two framework, which establishes a global 15% floor, fundamentally alters the calculus that sustains Malta’s model. Countries will be able to tax profits generated within their borders but booked in jurisdictions with a corporate tax rate below 15%. Ireland will weather this transition with its scale, infrastructure, educated workforce and genuine multinational operations. Malta offers none of these. When refund mechanisms reducing effective rates to 5% stop working, capital will evaporate as swiftly as it arrived; capital has no loyalty other than to itself.
Malta will then face a reckoning: what remains when the €479.7 billion in FDI stock leaves as easily as it entered, when nameplate companies vanish, and Valletta office buildings stand vacant? The Mediterranean sun will continue shining on ancient stone, and the Maltese people will remain. But the pass-through economy, that extraordinary construction of legal architecture and regulatory gymnastics, cannot survive contact with a world that no longer has a need for it.
Illicit cash flows might continue being laundered on the island, but after the greylisting, the country is unlikely to loosen enforcement much further. If it continues in its current trajectory, it will isolate itself further from an EU that already has little need for an island encouraging Russian oligarchs to purchase Maltese citizenship and firms to avoid paying taxes in other EU states. In the name of European solidarity, ethical financing and economic sustainability, it will need to pivot before it is left to dry out in the Mediterranean sun.
We’re pleased to share this guest blog from Jason Ward, Centre for International Corporate Tax Accountability and Research, CICTAR. This report on Starbucks provides a great example of how the current global tax system is abused in order to shift profits from producer countries in the Global South to multinational corporations headquartered in the Global North. It also shows why the current UN Tax Convention negotiations are so important for ending profit shifting and extraction from commodity-exporting countries.
Hidden behind Starbucks’ ‘ethical sourcing’ programme is a massive global tax dodge that shifts profits from coffee-producing countries to Switzerland. Customers pay an ‘ethical’ premium while Starbucks’ ‘Swiss Swindle’ helps to perpetuate poverty for farmers and workers who grow and harvest the coffee beans. The Swiss scheme also deprives governments in coffee-producing countries of much needed revenues to fund schools, hospitals and other public services to help tackle growing inequality and create a path towards a sustainable future.
As is often the case, corporations which have aggressive tax avoidance practices often treat all stakeholders with the same disregard, shifting profits to executives and shareholders and externalizing costs on society. Despite its claims, there appears to be nothing ethical about Starbucks. The global coffee giant has been charged with massive labour violations in its supply chain and now faces multiple class action lawsuits for misleading consumer on human rights claims. It has paid record fines for violating the rights of its direct employees in US stores and has refused to bargain in good faith with the growing and currently striking Starbucks Workers United union. If that wasn’t enough, Starbucks’ CEO gets paid more than 6,666 times the median worker, a ratio higher than any other S&P500 company.
The incredibly harmful role of Switzerland – as a commodity trading centre, a tax haven and secrecy jurisdiction – in aiding and abetting multinational corporations to shift profits away from producers in the Global South is too frequently overlooked. Starbucks provides a clear example of a much bigger global problem. However, while commodity trading and profit shifting are standard practice for many large multinationals, Starbucks appears to push this further than most others, with a stunning 18% mark-up on coffee beans in Switzerland, despite the beans never actually making their way up the Swiss Alps.
This 18% mark-up by Starbucks’ Coffee Trading Company (SCTC) in Switzerland on all global coffee purchases before re-selling to other Starbucks subsidiaries for roasting and retailing has been in place since 2011. A previous Starbucks report by us at the Centre for International Corporate Tax Accountability & Research estimated that this scheme had shifted at least US$1.3 billion in profits into the Swiss subsidiary over the last decade, or between US$100 and $150 million per year. The profits booked in Switzerland are also one way in which Starbucks reduces taxable income where customers actually buy their Pumpkin Spice lattes or other coffee drinks.
The 18% mark-up would not have been known without a European Commission investigation into Starbucks in 2015, following the 2012 expose of Starbucks’ UK tax dodging. Starbucks was compelled to provide financial information from the Swiss subsidiary to the European Commission which would otherwise not be publicly available. However, since Switzerland is not part of the European Union, the investigation focused on the issue of illegal state aid in the Netherlands. The inflated coffee prices paid by the Dutch subsidiary created losses and a tax shelter for the European operations. The Commission ruled against the Netherlands, but that was later – as with several other cases – overturned by the European court.
The Centre for International Corporate Tax Accountability & Research’s previous analysis found evidence – through the tracking of ongoing dividend payments from the Swiss subsidiary through Dutch and UK subsidiaries – that the 18% Swiss mark-up was ongoing. Starbucks changed the ownership of the Swiss subsidiary to one directly owned by a subsidiary in Washington state, where there is no state income tax and no requirement for financial reporting, as there is in the Netherlands and the UK. The dividend flows from Switzerland, derived from the 18% mark-up, are no longer traceable but there’s no reason to believe that the practice isn’t ongoing. The basic allegation was not contested by Starbucks. The Swiss subsidiary, despite its central role in Starbucks’ global corporate structure, is never mentioned in its recent annual reports to shareholders.
When Starbucks attempted to justify the introduction of the 18% mark-up (up from 3%) to the European Commission and in response to the Centre for International Corporate Tax Accountability & Research report, it argued that this was the costs of running C.A.F.E. Practices, its ‘ethical sourcing program’ via the Swiss subsidiary, including the use of its intellectual property. A brand new report by us, The ‘Swiss Swindle’: Does Starbucks short-change coffee-producing countries?, set out to evaluate these claims. The report examines the only publicly available financial statements from Starbucks’ ten Farmer Support Centers, which it claims are at the heart of its ‘ethical’ sourcing and are owned via the Swiss subsidiary.
Our analysis of the financial statements from Starbucks’ Farmer Support Centers in Colombia and Tanzania found negligible expenditures and limited benefits to farmers. The actual costs of the Farmer Support Centers are a tiny fraction of the 18% margin booked in Switzerland, where – on paper – the purchase of coffee beans occurs. The Farmer Support Centers appear more concerned about quality and supply of coffee beans rather than anything to do with the welfare of coffee-producing communities. There was no evidence that Starbucks holds or values any intellectual property from its C.A.F.E. Practices programme in Switzerland. If there is any intellectual property it is created, held and used by the Farmer Support Centers in coffee-producing countries, not in Switzerland.
Our latest report concludes that the primary purpose of the Swiss set-up is not to support farmers but to book profits from the purchase and sale of green coffee beans in Switzerland, at very low tax rates, and far from the reach of tax authorities in producer countries where revenue for public services, including health, education and sanitation, is urgently needed. However, the existence of these Farmer Support Centers means that Starbucks has a legal physical presence in coffee-producing countries and that revenue from coffee sales that is currently shifted to Switzerland, should be taxable where beans are grown and value is genuinely created. This is the core principle, although not the practice, of the current global tax system.
The report recommends that governments from nations like Brazil, Vietnam, Colombia, Indonesia, Tanzania, Uganda, Ethiopia and others – which rely extensively on coffee production and export – fully explore all options under existing rules to tax the coffee-trading profits currently booked in Switzerland. Additionally, it calls for major global tax reforms through the current UN Tax Convention negotiations to end the profit shifting and extraction from commodity-exporting countries.
Starbucks provides an example – within one corporation’s global supply chain – of how the current global tax system is abused to shift profits from producer countries in the Global South to multinational corporations headquartered in the Global North. Switzerland, as a commodity trading center with low tax rates and high levels of secrecy, plays a major role in facilitating these practices.
If Starbucks wants to live up to its language on ethical sourcing, it could easily use the current 18% margin to pay farmers a significantly higher price and book those sales in the countries where they actually occur and where value is created. In the meanwhile, governments should immediately seek to tax profits artificially shifted by Starbucks to Switzerland and for everyone to push for reforms to the global tax system to end the ongoing exploitation of commodity producing countries across the Global South.
We’re pleased to share this blog by Rachel Etter-Phoya, originally posted by Africa Is a Country. From colonial accounting tricks to modern tax havens, Nkrumah understood how capital escapes, and why political independence was never enough.
You won’t find the words “tax haven” or “profit shifting” among the pages of Kwame Nkrumah’s Neocolonialism, the Last Stage of Imperialism, published 60 years ago. Yet Ghana’s first president and pan-Africanist recounts a familiar story of corporate greed and capital flight, where imperial corporations with their complex multi-jurisdiction structures, aggressive tax practices, and clandestine deals are a “drain on resources from the less developed countries to the highly developed ones.”
From Liberia’s rubber to the Congo’s copper, Nkrumah tells story after story of how the control over resources and finance was in the hands of corporations created or backed by former colonial powers.
“And when independent African countries attempt to establish a certain rectification by leveling taxes on company profits,” Nkrumah writes, “they draw resentment that is echoed in dire warnings in the imperialist press that they will stifle foreign investment if they continue such encroachments upon expatriate rights.”
We can tell a similar tale today. The Tax Justice Network’s Corporate Tax Haven Index, updated in December 2025, shows that European countries enable more than 50% of the total tax abuse perpetrated by multinational corporations, while African countries enable less than 5%.
Multinational corporations use a web of tax havens, woven together with unfair tax treaties, to pay proportionally far less tax than many people, even though their own employees pay, and yet still argue they can’t increase wages. The most corrosive corporate tax havens are Switzerland and two British Overseas Territories—the British Virgin Islands and the Cayman Islands.
A particularly insidious device is the patent box regime. Originally designed to incentivize innovative research and development, such as vaccines, multinational corporations tend to move their patents out of the places where they develop, make, or sell their goods and services, and into corporate tax havens, allowing them to underpay tax. Forty-two countries of the 70 countries monitored on the Corporate Tax Haven Index, which together host 87% of global foreign direct investments, have patent box rules or fully exempt multinational corporations from paying tax.
French pharma company Sanofi established a regional hub in South Africa to produce polio vaccines. A tax treaty between the countries prevents South Africa from taxing royalty payments made in the course of drug manufacturing at the usual 15%. Sanofi’s South African subsidiary likely pays royalties to its French company for using the patent to manufacture the vaccines. The company essentially pays itself to use its own knowledge, reducing the taxes it owes in South Africa.
US pharmaceutical companies Johnson & Johnson and Pfizer are following suit with manufacturing plants in South Africa, where the US-South Africa tax treaty means South Africa imposes no tax on royalty payments from South African subsidiaries to American multinationals, similar to the France-South Africa treaty. The intellectual property tax discount that the US, Ireland, France, UK, and other countries offer helps multinational corporations to shift profits away from countries like South Africa, where drugs are actually manufactured.
All countries lose out to tax abuse, but the impacts are greatest for those most historically plundered nations. Global North countries forgo huge sums of tax revenue with patent box regimes, and South Africa is estimated to lose more than US$450 million due to intellectual property profit shifting.
Exploiting patent box regimes is just one reason Africa continues to lose close to $90 billion each year to illicit financial flows. The other challenge is a century-old global tax system that was designed by the League of Nations when most African countries were still colonies, which taxes multinational corporations based on where they declare profits rather than where they do business, employ workers, extract resources, make products, and sell services.
The scale of the losses and the inability (or unwillingness) of the club of rich countries—the OECD—to effectively and inclusively address the problem is why African countries are acting.
Taking heed of Nkrumah’s words that Africa’s structural transformation from the “financial and economic empires [that] are pan-African […] can only be challenged on a pan-African basis,” the African Group at the UN has successfully tabled a resolution to start negotiations on a UN tax convention, which will conclude in 2027.
In November, negotiations on the UN Framework Convention on International Tax Cooperation—as it is known—happened for the first time on African soil, in Nairobi, Kenya. Countries discussed a new approach to taxing multinational corporations based on the principle of the “fair allocation of taxing rights,” which would allocate profits to countries based on real economic activity and tax them accordingly, rather than allowing profits to be squirreled away in tax havens.
Fairer taxing rights would be supported by transparency tools that disclose the real (beneficial) owners of companies, allow tax authorities to automatically exchange information on residents, and require companies to publicly report their activity on a country-by-country basis.
Most countries agree that tax rules need to be fairer, but OECD countries, including notorious tax havens like Switzerland and the Netherlands, would prefer existing fora, rules, and processes to continue to apply.
If Nkrumah were alive today, there’s no question he would be backing another attempt to break Africa free from old rules that only work for their old masters. As he wrote, “With economic unity, [of] countries in Africa […]. We would all be in a better bargaining position […] to establish adequate taxation of foreign factor earnings. In fact, a whole new pattern of economic development would be made possible.” How different the pattern might have been had those words been heeded at the time.
Image: Not known, Diefenbaker Centre credits British Government, Public domain, via Wikimedia Commons,
Queen Elizabeth II with several of her prime ministers and other Commonwealth of Nations leaders at the 1960 Commonwealth Prime Ministers’ Conference
New Convention draft and background documents to watch
The UN has released a new draft convention text and background documents for each of the workstreams ahead of the next round of negotiations in New York (available here). At the same time, we are publishing an update to our comprehensive database of the positions taken by individual countries thus far – so it’s possible to see how different positions are reflected, or not, in the text so far. Comparing the newly issued text with the positions States have adopted in their oral and written submissions, especially those from the latest round of negotiations in Nairobi, reveals interesting patterns and sheds light on how the Convention is gradually taking shape through successive interactions.
What happened in Nairobi?
Nairobi marked an important moment in the process leading to an UN Framework Convention on International Tax Cooperation (UNFCITC). Demands for fairer global tax governance have long been driven by countries from the Global South, particularly since the Addis Ababa Agenda, but this was the first time that formal negotiations of this process took place on the African continent. Throughout the sessions, delegations and stakeholders repeatedly noted that holding the negotiations in Nairobi made the process more accessible. In particular, it enabled strong participation from stakeholders who are often unable to attend tax negotiations because of visa barriers, travel costs, or limited formal channels for engagement.
How we covered the negotiations
We followed the negotiations closely and covered the debates on our UN Tax Convention landing page. For each topic discussed, the page includes a summary of how discussions unfolded. The landing page— recently updated—also brings together key resources such as upcoming negotiation dates, an FAQ, thematic sections, one-pagers on key concepts and additional background materials.
Submissions and database update
After the sessions concluded, member states and other stakeholders were invited to submit written comments on the papers prepared by the Secretariat for the Framework Convention workstream (WS1) and the dispute resolution workstream (WS3). The Tax Justice Network submitted contributions to both WS1 and WS3. We also co-signed the joint submission coordinated through the CSO mechanism, as well as specific submission focused on gender-related aspects.
Following this consultation, the Secretariat published all written submissions, which we have begun integrating into our Who Wants What database, which can be accessed via our UN tax convention webpage and available in a summarising report. This public database has tracked countries’ positions since the start of the negotiations and is now being updated to reflect the latest contributions. Users can explore positions by country, by article, or over time. This is an ongoing, collaborative project developed with academics from the University of Virginia’s Law International Human Right Clinic. We aim to update the database quickly, as a helpful tool as we navigate this process, but there is a trade-off between the speed and the exactitude at which we keep track of all the positions. Errors may occur, and we thus encourage readers to flag any issues they identify. As much as possible, we try to stick to the specific text and wording raised by oral and written submissions.
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Mapping arguments and narratives in the negotiations
One useful feature of this database is the nuance it allows in analysing country positions, particularly in mapping how specific arguments are framed and defended. Unsurprisingly, many of the themes found in the written submissions echo points previously raised by country delegations in earlier sessions. Those closely following the process will, by this stage, be familiar with the repeated use of certain expressions to limit the scope or lower the ambition of the framework convention. Notions such as sovereignty, the relationship with other instruments and institutions, or the absence of clear definitions – all legitimate considerations in the development of an effective and ambitious framework – are too often invoked, or misused, to justify weakening that ambition.
Sovereignty and cooperation
For instance, consider the concept of sovereignty, raised in 53 interventions, either in Nairobi or in written submissions. The large majority of these positions relate to Article 5 on High Net-Worth Individuals (15), Article 8 on Harmful Tax Practices (10), and Article 10 on Dispute Prevention and Resolution (10).
Most positions referring to sovereignty are grounded in a way of thinking that views sovereignty as restrictive, if not directly in opposition, to cooperation. In this view, whether a country decides or not to implement a progressive tax system, or the types of tax incentive it decides to propose is a matter of domestic decision-making. The problem with this approach is that it too often overlooks how a country’s tax rules can lead to international spillovers, undermining each other’s sovereignty. For instance, tax regimes implemented in one country can have significant effects on the capacity of others to enact their own rules. Further, the claim that the taxation of high-net-worth individuals is a domestic issue forgets the reality that wealthy individuals source their income and wealth in multiple jurisdictions, and information necessary to enact domestic laws may be dependent on exchange of information.
In other words, guaranteeing and strengthening sovereign tax systems must be a key objective of international tax cooperation, but the status quo fails to secure that. While previous efforts to address the cross-border spillovers of such regimes have often been marked by unfairness and even hypocrisy, the very objective of the General Assembly’s mandate is to address these cross-border implications in a fairer and more inclusive setting. As the Kenyan delegate defended in Nairobi, for Global South countries, fighting the negative spillovers of higher-income countries’ aggressive tax practices is in itself a matter of safeguarding their national sovereignty. This notion is also echoed in Brazil’s written submission which advocates, in the context of Article 4, for “fiscal sovereignty and fairness in the apportionment of taxing rights, restoring the capacity of source countries to tax income-generating activities provided within their borders without necessarily requiring a physical presence”.
In addition, invoking sovereignty should not preclude forms of cooperation that entail some degree of policy coordination—including, for example, coordinated approaches to tax multinational corporations or high-net-worth individuals. As important as creating an enabling environment for protecting domestic tax-sovereign decisions is, the Convention should also open the door to coordinated approaches that help Member States advance its aims, including establishing an inclusive, fair, transparent, efficient, equitable and effective international tax system for sustainable development, enhancing the legitimacy, certainty, resilience and fairness of international tax rules, and addressing challenges to strengthening domestic resource mobilisation.
The need for an inclusive and universal framework in response to limitations of pre-existing institutions
Another familiar argument for those following the debates is the idea of duplication, or that the Framework Convention should not include in its scope or simply defer the treatment of topics which have been negotiated through pre-existing instruments or forums. Among the 139 positions that address the relationship with other instruments or institutions and the risk of overlap, the large majority focus on Article 8 on Harmful Tax Practices (38) and Article 6 on Mutual Administrative Assistance (21), followed by Article 4 on the Allocation of Taxing Rights (17) and Article 5 on High Net-Worth Individuals (16).
Most concerns about overlap focus on two specific forums: the Global Forum – and particularly Multilateral Convention on Mutual Administrative Assistance with its subsidiary instruments for exchange of information – and the Forum on Harmful Tax Practices. With regard to Art. 4, existing bilateral treaties are invoked, with some countries advancing the strained argument that the mere fact of agreement between two parties is sufficient to render such treaties fair. It is indicative of a bias in the current status quo that very limited concerns about relationships with pre-existing instruments, or about overlap more broadly, are raised in relation to the articles on illicit financial flows or sustainable development.
In addition, as eloquently argued by countries such as Kenya, Nigeria, Ghana, Sierra Leone and Rwanda —both during discussions in Nairobi and in some of their written submissions — while the relationship with pre-existing instruments and forums is an important point, it cannot be ignored that existing forums lack universal participation and do not appear to deliver equally for all UN Member States. The momentum behind the call for a Framework Convention and the adoption of new commitments should reflect the desire among countries to generate the political will necessary to move beyond the limitations of the current system and achieve better outcomes.
Take, for instance, the Convention on Mutual Administrative Assistance. The 2010 amendment of this legal instrument represented a great achievement in international tax cooperation, as it allowed a broader set of countries to become party to the Convention and join the legal framework to engage in exchange of information and other forms of cooperative assistance. Yet, from a technical perspective, the Convention and its associated Multilateral Competent Authority Agreements still have significant problems, particularly regarding reciprocity requirements and the use of reservations.
With respect to reciprocity, the strict requirement in some competent authority agreements that all parties provide information at the same pace imposes equal obligations on countries with vastly unequal export of financial sectors. Large financial centres are expected to exchange information under the same conditions as low-income countries. Given the higher likelihood that wealthy individuals conceal assets in major financial hubs rather than in poorer jurisdictions, this formal equality results in a substantively biased arrangement. This does not imply that these countries would not participate, and in fact the Africa group made sure to strengthen the commitment, including by proposing the removal of “as such exchange become possible” from the article on High-Net-Worth Individuals. But strict reciprocity remains a clear obstacle to effective exchange in practice.
Regarding reservations, as discussed in previous research, the Convention allows countries to opt out of certain forms of cooperation. These include the exchange of information covering a broader range of taxes and assistance in the collection of tax debts. In practice, this “flexibility” allows certain developed countries to pick and choose which countries they want to provide a broader access cooperation to, for instance, by adopting more comprehensive forms of cooperation through regional instruments, while denying equivalent treatment to developing countries. Beyond these technical concerns, the political institutional framework built on top of the Convention, the Global Forum, was established under the umbrella of the exclusionary OECD, and despite its relatively formal autonomy, it is not an adequate substitute for a truly universal body with inclusive decision-making at the United Nations.
Definitions and the concept of illicit financial flows
At the same time, this concern for coherence with existing processes is applied unevenly. In certain areas, pre-existing discussions appear to be strategically set aside, most notably with respect to existing definitions of illicit financial flows. Clear and workable definitions are essential for the effective development of the Framework, and this will be an important element of the upcoming work of the Secretariat and Member States. However, concerns regarding definitions are not evenly distributed, but are instead heavily concentrated in Article 7 on illicit financial flows. Of the 68 positions that raise issues related to definitional clarity, 27 focus on this article. Concerns about definitions are also prominent in Articles 4 on the allocation of taxing rights (13), Article 5 on High Net-Worth Individuals (12), and Article 8 on Harmful Tax Practices (11).
However, illicit financial flows are not a concept without history. It can be traced back to the African Union and the Economic Commission for Africa’s High-Level Panel on Illicit Financial Flows out of Africa, chaired by former South African President Thabo Mbeki. As India clearly noted in Nairobi, a statistical definition has already been agreed as a part of the Sustainable Development process, one that includes both tax avoidance and tax evasion. This is not to dismiss the existence of disagreements over definitions – which might remain – but rather to underscore that these discussions do not begin from a blank slate.
What’s coming up
International tax negotiations are at a critical moment. The side-by-side agreement, negotiated behind closed doors, makes it all the more urgent to advance towards a system of international tax governance that is responsive and delivers for the needs of all. The UN tax convention is a rare opportunity to do just that.
In 2026, the Ad Hoc Committee will convene three meetings: the first in February in New York, followed by a second session in August, also in New York, and a final session in November/December in Nairobi. It is deeply concerning that, at this critical moment in the negotiations, the participation of certain stakeholders is at risk due to visa-related barriers.
We need to deliver an instrument that reflects the views of different countries committed to building a fairer, more effective international tax system. The database, which is an ongoing effort to understand what different countries aspire to achieve in this process, is an effort to assist in that.
Stay tuned to our UN tax convention webpage for a detailed analysis of these documents and insights into what to expect at the next negotiating session.
What a year! In 2025, our work featured in more than 43 broadcasts, 2,950 online media articles, and 278 print pieces, and attracted over 427,668 visitors to our website.
To help you revisit some of the highlights, we’ve pulled together a roundup of our most read pieces from 2025.
Our three most-viewed pages on our website this year included press releases, Millionaire exodus did not occur, study reveals, Trump demands countries surrender tax sovereignty at economic gunpoint and our blog Britain’s Slave Owner Compensation Loan, reparations and tax havenry which continues to make the top three for yet another year.
Our most read reports this year
Our flagship State of Tax Justice 2024 report topped our reads, followed by our eye-opening report debunking The millionaire exodus myth and revealing analysis on Taxing extreme wealth: what countries around the world could gain from progressive wealth taxes.
Our most read pieces from 2025
We published 59 blogs and press releases this year. Here’s a look at our top 10 most read new pieces:
Other pages our readers particularly loved in 2025
Our frequently asked question continued to be a go-to resource throughout the year, with the top spots being taken by “what is transfer pricing”, “Is tax avoidance legal? How is it different from tax evasion?”, “what is profit shifting”, “Where are tax havens located?” and “Is taxation theft?”.
Country profiles also proved popular this year, with Switzerland topping our most viewed, followed by Indonesia. The United Kingdom remained in third place, while Norway moved up to fourth. The United States rounded out the top five holding on to is fifth place position.
Several of our cornerstone topics also attracted strong engagement.
In the areas of human rights and advocacy, our work linking tax justice and climate justice, Reclaiming tax sovereignty to transform global climate finance generated high levels of engagement and helped drive momentum ahead of COP30. This momentum continued with a co-organised event, ‘A climate for change: Towards just taxation for climate finance’, held during the negotiations toward a UN tax convention.
Alongside this, our work on tax and gender also drew considerable interest, particularly with the release of Bled dry: The gendered impact of tax abuse, illicit financial flows and debt in Africa.
Lastly, our work on beneficial ownership transparency received strong readership, led by our report Asset beneficial ownership – Enforcing wealth tax & other positive spillover effects.
Happy reading, from all of us at the Tax Justice Network!
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“It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of light, it was the season of darkness, it was the spring of hope, it was the winter of despair, we had everything before us, we had nothing before us, we were all going direct to Heaven, we were all going direct the other way—in short, the period was so far like the present period, that some of its noisiest authorities insisted on its being received, for good or for evil, in the superlative degree of comparison only.”
― Charles Dickens, A Tale of Two Cities
We are living through two quite distinct, but inseparable tales of tax justice. In one tale, the greatest triumph of all is at hand. But in the other lurks the spectre of catastrophe.
Tax is our social superpower. When taxes are effective, they not only raise revenue for crucial public services, but allow redistribution to curb inequalities, repricing to curb social ‘bads’ like tobacco consumption and carbon emission, and above all representation. Yes, tax turns out to be one of the only things that is consistently associated with stronger democracies and more effective political representation. Worth remembering in these turbulent times, as billionaires seek political power for their own, antisocial ends.
The overarching challenge for tax justice is, as it has always been, to ensure that people are empowered to choose the societies they wish. That relies on people living in states that have full tax sovereignty. And that, in turn, requires international tax cooperation.
Each year, countries lose around half a trillion dollars from the crossborder tax abuse of multinational companies, and wealthy individuals hiding their ownership of assets and income streams offshore. But we know what the solutions are! Critical measures brought forward by the tax justice movement, including the ABC (automatic exchange of information, beneficial ownership transparency and country by country reporting by multinational companies) have brought literally trillions of dollars of income into the sight of tax authorities for the first time, and increased revenues by billions.
But none of these steps have been delivered in full. First, because the OECD is fundamentally unjust. This club of rich countries has dominated international rule-setting, claiming for themselves the majority of the benefits of introducing tax justice approaches, largely excluding lower-income countries. And second, because the OECD is deeply flawed. The absence of open decision-making, the effective veto of the United States, and the deeply embedded corporate lobby, mean even within the OECD countries, the adoption of each measure has been so limited and piecemeal, and lacking in the transparency to allow public accountability, that even the very substantial benefits obtained are a fraction of what they could be.
No, the great triumph is not in the partial adoption of a swathe of once-impossible technical measures. It is instead in the political – and specifically, in the potential to overturn the ineffective and unfair dominance of the OECD, and replace it with a globally inclusive and fully effective forum.
Such are the failures of the current system, that almost everyone stands to gain from a fundamental fix. The OECD’s member countries would benefit from hundreds of billions of dollars in additional revenue. Lower-income countries would see the largest proportional gains, translating into much greater human impacts – from stronger governance to reductions in infant and maternal mortality.
And so here is the real triumph: in 2025, for the first time ever, each country of the world sat around the same table to negotiate international tax rules.
Specifically, countries are negotiating a UN Framework Convention on International Tax Cooperation. The convention can provide immediate progress on key issues, and also create the framework body where Conferences of the Parties will agree new tax rules in future.
Nothing is won yet, however. The next 18 months will determine the final text. The challenge for the Tax Justice Network, the Global Alliance for Tax Justice and the global movement spanning from climate justice to human rights, is to channel our collective efforts to ensure the opportunity is seized – because if we fail, a hundred years is a long time to wait for a second chance.
Here’s the thing. With just a few bumps on the road, the global movement for tax justice has been building and growing for two decades now. That’s how we got here – how we have delivered so many policies once derided as ‘impossible’ or ‘Utopian’ onto the global agenda as well as nationally, in countries all around the world. That’s how we were able to normalise the idea of a UN convention as the path to the fundamental reform that is needed, and where the momentum came from.
But now, as we sit at the cusp of the greatest progress in a hundred years, a threat is looming.
Money. Or rather, the lack of it.
This issue runs through the whole negotiations. The secretariat is woefully under-resourced because of the hiring freeze affecting the whole United Nations, and the failure of rich countries to meet their responsibilities – either to the UN itself or to the tax negotiations more specifically.
At the same time, the tax justice movement has hit a major bump. Funding from governments and major foundations has never been large – but now it is shrinking, fast. Official aid budgets are under pressure like never before. Major US foundations are understandably focused on defending democracy at home. The ‘philanthropy blind spot’ on tax, identified by funders themselves as long ago as 2021, has become an urgent problem.
Elsewhere, the search for research funding is increasingly desperate, as universities across the global North face tightening budgets – and increasingly malign approaches from a range of governments, not only in the US.
A range of organisations in the space of tax justice, including the important overlaps with human rights, are now facing budget cuts and sometimes painful restructuring.
The Tax Justice Network, in common with partners and allies in this space, is an incredibly ‘thin’ organisation. We have no physical office or associated costs. Our people, spread across the world, are our core asset and the great majority of our budget is made up of salaries. (Salaries that are far from excessive, I should add.)
The effect is that any budget cut translates directly and starkly into cuts to the team. We are in the process of losing eight key members of the team – around 20% of our core staff. And to be clear, these are exceptional people who have been carrying out work of clear strategic value. (Hire them!) It’s not that there were ‘easy’ cuts to make to work that didn’t matter.
We have focused the restructure on ensuring even greater support to the UN convention negotiations. But we are inevitably weaker as an organisation, just as the process enters its critical, final 18 months.
With other organisations facing the pinch too, there will be systemic effects on the ability to support the convention – and indeed to push for national and international priorities outside of the negotiations, including wealth taxes and the crucial policies to deliver meaningful climate finance. Not least, the need to focus ever more closely on fundraising, from individual donations to commercial licensing of our data as well as the search for institutional support and bidding for research grants, can only take attention away from the core work of achieving change.
And so as Dickens put it, we face both a spring of hope, and a winter of despair. The UN convention negotiations may unleash the social superpower of tax in a way that allows fundamental improvements to people’s lives all around the world. But we run the risk of missing this unprecedented opportunity – and all for want of a trivial amount of money.
The Tax Justice Network’s total budget has never exceeded three million dollars, and has been far lower on average across most of our history. With whatever caveats you might think of, and the most cautious attribution possible, the return on investment in terms of tax revenues has been thousands to one – and possibly far higher. And that goes for the whole tax justice movement too. (Our independent 20-year evaluation has more on this.)
What is my ask to you, kind reader? There are two – one for each city in this tale. Together they might take us to the best of times.
First, if you are able, please support our work directly. Individual donations can play an important role in giving us the financial flexibility to respond effectively to the challenges of institutional funding and philanthropy.
Second, if you are involved with an institutional funder or in philanthropy, please consider the argument for prioritising tax justice at this critical juncture. If it will ever be worth supporting the efforts of our movement, it is surely now – and the window of the UN negotiations is a short one. Do get in touch if we can help to explore how you could provide strategic support.
Over 100 million children are going hungry this Christmas.
Elon Musk could give every child in the world a $90 gift card, creating 2 billion smiles and still be the richest man alive!
Let’s help the world’s richest man feel like the richest man in town this Christmas, by inviting him to gift 44% of his wealth to the children of the world.
We’d also settle for a 2% wealth tax on the superrich.
Help us spread the cheer to Elon
Sign our “Christmas Card” to Elon Musk
Spread the cheer on social media
“Hi @elonmusk wishing you become the world’s richest man this Xmas by buying every child a $90 gift card with half ur wealth. You’d stop 100m children from going hungry, create 2bn smiles & still be the richest man alive! I’d also settle for a 2% #WealthTax
https://c.org/jnnZhmp6J4
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Watch and share our interview with The Guardian
Extreme wealth shrinks our economies, makes us poorer and weakens our democracy.
We can protect people, economies and planet from the harms of extreme wealth by fixing the tax rules that make extreme wealth possible.
That’s what wealth taxes do.
Our economies are supposed to let us earn the wealth we need to lead secure and comfortable lives.
But our tax rules make it easier for the superrich to collect wealth than for the rest of us to earn it.
This has let the superrich collect extreme wealth to the point of making our economies insecure, and making it barely pay to earn a living.
Elon Musk earns a $1 salary as CEO, just like some of the other richest billionaires like Mark Zuckerberg and Larry Ellison. His wealth doesn’t come from ‘earned wealth’ like yours, it comes from ‘collected wealth’.
Earned wealth is wealth you gain by working. It’s getting paid a salary, income or tips for what you do. Collected wealth is wealth you gain by owning things. It’s getting paid dividends for owing stocks or rent money for owning real estate.
Most people primarily earn their wealth, but the superrich’s wealth is almost entirely collected.
Earned wealth cannot create billionaires. Only collected wealth grows fast enough to do so.
It’s impossible to earn a billion dollars.
The average US worker would have to work 20 times longer than humans have existed – over 7 million years – to earn as much wealth as Elon Musk has collected.
Most countries tax collected wealth a lot less than earned wealth. And because the wealth of billionaires like Elon Musk is practically entirely collected, billionaires tend to pay half the tax rates everybody else pays on their wealth.
This special tax treatment has helped the superrich quadruple their wealth since the 1980s to extreme levels. Studies directly link this rise in extreme wealth to lower economic productivity, to more households going into debt and to people living shorter lives.
A prestigious report published this year by some of the world’s most respected economists concluded that the rise of extreme wealth is a “threat to democracy”. Over half of millionaires agree.
Countries can raise $2 trillion in tax a year by applying a 2% wealth tax today. That’s enough public money to meet most countries’ climate finance needs, and leave billions to spare for local public services.
But wealth taxes do a lot more than just raise trillions.
Wealth taxes end the special treatment that collected wealth gets over earned wealth. They protect the earner way of life we all rely on from the harms of extreme wealth.
That’s what makes wealth taxes so powerful.
Whether you’re a wealth collector or a wealth earner, we all have an equal responsibility to pitch in our fair share.
Make noise about the UN tax convention
Our governments are currently negotiating the biggest shakeup in history to global tax rules at the UN. The outcome of these talks – a world-first UN tax convention – will impact every one of us, wherever we are in the world, and shape people’s lives for generations to come.
The UN tax convention is already on course to deliver huge tax justice wins for all us, including commitments to stop the superrich from cheating on tax and to making sure they’re taxed more effectively.
If you’re not already, get up to speed on the UN talks here and sign up to our newsletter stay updated.
Donate to Tax Justice Network
We rely on donations from people like you who value our research and campaigning to keep our work going. Help us do more work like the work above with a donation.
Dive deeper
The wealth Elon Musk owns stands at $494.5 billion, according to Forbes’ Real Time Billionaire List on 11 December 2025. There are more than 2.4 billion children in the world under the age of 18, according to the United Nations.
Buying every child a $90 gift card would come to a total of $216.8 billion. Subtracting this sum from Elon Musk’s reported $494.5 billion, for illustrative purposes, would leaved Elon with $277.7 billion. That’s enough to keep Elon Musk at the top of list Forbes’ billionaire list in first place, just above Larry Ellison, who’s wealth stood at $276.3 billion according to Forbes on 11 December 2025.
Over the past decade, the use of administrative tax data has somewhat quietly transformed academic research on tax abuse, compliance, and enforcement. These datasets—corporate tax returns, country by country reports, transaction-level customs records, payroll files, and other administrative sources—make it possible to study firm behaviour, compliance, and tax avoidance with a level of precision that survey or macro data simply cannot provide.
As we increasingly worked with such data at the Tax Justice Network, in collaboration with colleagues across governments and research institutions around the world, it became clear that administrative data is not just valuable; it is indispensable for understanding how tax systems function in practice rather than in theory.
But alongside this immense value, we also saw a high level of fragmentation. Every country, every institution, every research team had its own systems, protocols, formats, and access procedures. Some governments operated full-fledged secure research labs; others relied on informal arrangements or ad-hoc agreements tied to specific individuals. Even among researchers, knowledge about where administrative data existed—or how it could be accessed—tended to travel through personal networks rather than through any systematic channels. The result was predictable: duplicated efforts, steep learning curves, and missed opportunities for collaboration. We saw skilled researchers struggling to find basic information about what had already been done, and tax administrations unsure how their data was being used elsewhere or how to structure new partnerships.
That experience is what led us to launch Admin Data for Tax Justice, a new initiative aimed at reducing this fragmentation and strengthening global collaborations around administrative tax data. The central idea is simple: if we want more evidence-based tax policy, we need structures that make it easy for researchers and tax administrations to work together—ethically, securely and efficiently. That means mapping the existing research, documenting where administrative data has been used and how, supporting institutions as they develop or expand their own data-access infrastructures, and creating opportunities for networking across two groups of stakeholders that have remained largely isolated in the past: researchers and tax administration staff.
A major step toward that goal is the release of the initiative’s website, available today at admindata.taxjustice.net, providing the first systematic database of academic and policy research using administrative tax data worldwide. The database already contains hundreds of papers, covering a wide range of countries, datasets, and empirical strategies. This makes the field visible in a way it has never been before: early-career researchers can quickly see what has been done in which countries using which data; tax administrations can observe how comparable data is used elsewhere; and funders can identify gaps where new investments would have the greatest impact. It is also a foundation on which we can build better standards—whether for documentation, anonymisation, secure access, or cross-institutional collaboration. The website will be filled with such resources as the initiative develops. To illustrate how rapidly this field has grown, the figure below shows the number of papers in the database published over time. The trend is unmistakable and confirms what many of us have seen at recent academic conferences and workshops: administrative data is becoming central to modern tax research, and the growth in output reflects both the increasing availability of data and the expanding demand for rigorous, micro-level evidence.
We are launching the initiative formally through a virtual event on 15 December 2025, at 16:00 CET, where we will introduce the website and the database and discuss its role in building a more connected and accessible research ecosystem. This will be followed by a high-level panel discussion with leading researchers and policymakers who have helped shape the field of administrative-data research: moderated by Alex Cobham (Chief Executive, Tax Justice Network) and featuring Annette Alstadsæter (Professor of Economics, Skatteforsk – Centre for Tax Research, Norwegian University of Life Sciences), Pierre Bachas (Senior Economist, World Bank and EU Tax Observatory), Kat Bilicka (Lars Peter Hansen Associate Professor of Economics and Statistics, Utah State University), Abdul Muheet Chowdhary (Senior Programme Officer, South Centre), and Giovanni Occhiali (Development Economist, International Centre for Tax and Development). The discussion will examine the analytical potential of administrative microdata, lessons from successful data-access models, and the institutional conditions required for secure, ethical, and long-term data use. Panellists will also reflect on how better data infrastructures can transform research on tax avoidance, compliance, inequality, and public-sector capacity.
The initiative is supported by a growing network of partners, including Skatteforsk, the EU Tax Observatory, UNU-WIDER, the World Bank, the Institute for Fiscal Studies (TaxDev), the International Centre for Tax and Development, UNCTAD, United Nations Economic Commission for Africa, ODI Global, the South Centre, and Charles University.
Let us know if your institution would like to join the initiative!
The virtual launch will also pave the way for the initiative’s first in-person workshop in Prague, bringing together 35 researchers and tax-administration partners from 19 countries to share lessons, identify next steps, and strengthen the foundation for long-term collaboration. Further events are planned for 2026, including a regional convening in Accra in Q2, as we expand the initiative’s global reach and continue building a network capable of supporting better tax research and better tax policy worldwide.