List of the world's most notorious tax havens (2024)

What is a tax haven?

A tax haven is a country in which the taxation of foreigners or foreign companies is exploited on advantageous terms to reduce the tax burden in the actual home country.

The term "tax haven" is not clearly defined. There is no absolute measure as to when a country is a tax haven or not. Basically, any country can be a tax haven if the conditions are right for a person or company. In some cases, even Germany and the USA are considered tax havens.

It is not only countries that levy particularly low taxes on certain types of income that are regarded as tax havens. A popular form of tax evasion is, for example, the "parking" of funds in countries to hide them from the local tax authorities. In this context, Switzerland is often cited for its strict banking secrecy.

Explanation of the individual lists:

The black lists of tax evaders

In 2017, the European Union drew up what was then a rather extensive blacklist of "non-cooperative countries and territories" of 19 states that it considered to be tax havens. However, this list never entered into force. After numerous objections and deletions, this list was whittled down to include only five countries by the end of 2018. In February 2019, the European Commission adopted a new list that was now comprised of 23 countries, which was again cut in half in February 2020. New lists are drawn up year after year, which now only include a few entries. The latest list from 2023 includes 15 countries. Often criticized here are the reasons for leaving a country off the list. For example, Turkey was repeatedly granted a deferral for "political reasons." The fact that the Cayman Islands were never on the list seems even stranger. Before Brexit, they were considered an EU territory and therefore could not be listed by definition.

The FATF (Financial Action Task Force on Money Laundering) is an association of the European Union, the Gulf Cooperation Council and 38 individual countries. These include China, Russia and the USA. The FATF's black and grey list is one of the most internationally recognized and has the highest weight alongside the EU list.

Oxfam is a non-governmental organisation based in Oxford, England. It is an association of numerous aid and development organisations with a focus on development aid and poverty reduction. Oxfam continuously analyses numerous countries and at the end of 2018, independently of other lists, placed the countries listed above on its own blacklist. The 35 listed countries also include the 4 EU states Ireland, Luxembourg, Malta and the Netherlands. Unfortunately, there is no newer list yet. The Oxfam list, by the way, is based on the same 92 states that the European Commission also examined. Oxfam has also examined the 28 EU states and came up with completely different results.

The International Monetary Fund (IMF) avoids the term "tax haven," but provides a similar list under the term "offshore financial centres," especially since this list is intended to show countries whose financial strength extends considerably beyond their own economic performance. The fact that the IMF also distinguishes between regional and offshore financial centers means an offshore financial center is a potential tax haven. On the capital market, capital usually goes to the person who earned it or to the place where it is taxed lowest.

In its CBI list (citizenship by investment), the OECD lists a number of countries in which citizenship can be acquired through sufficiently high investments. The background to this is that citizens often have other taxation models and rights at their disposal. This does not directly imply a danger of tax evasion, but there is a possibility of misuse.

Incidentally, the OECD also had its own blacklist of tax havens until 2009. All 42 countries ever listed have since made far-reaching concessions in order not to suffer sanctions. In the course of this, the banking secrecy laws of Switzerland, Andorra, Liechtenstein and Monaco have also been relaxed.

The strength of banking secrecy also determines how well money can be hidden in a country. In this context, the anonymous numbered accounts in Switzerland are well known. Although they do not exempt the holder from tax liability, they hide them well from foreign authorities. The "Financial Secrecy Index" (FSI) measures the effectiveness of a country's laws in concealing money. From a total of 141 countries, the index of the year 2022 determines the degree of secrecy for capital and its owners, as well as the amount of money moved through these countries in relation to the global financial market. Very high on this list are two countries that are otherwise rarely mentioned in this context: The United States (rank 1) and Germany (rank 7).

* The marked countries are not independent and sovereign states, but dependent territories of other states. Cf. also our article What is a country?