Tax Havens Under Fire

The Organization for Economic Cooperation and Development (OECD) is an organization composed of members of 29 industrialized countries that strives to analyze trends, forecast economic development, and coordinate international policies. The members of the organization are, as a group, committed to encouraging a free market economy and a pluralistic democracy.

The organization finished two days of meetings last week, the purpose of which was to address the growing concern about harmful tax practices in countries that encourage investment that is subject to little or no taxation. This Forum on Harmful Tax Practices focused on identifying countries that, among other issues, have no or low effective tax rates,

As a result of last week's meetings, the OECD published a list [1] of 35 tax havens and 47 preferential regimes across the world that participate in what may be considered to be tax competition. It is the plan of the OECD to use the information compiled at the recent meetings to initiate a two-year plan of developing a method for combating harmful tax practices.

Some commonly thought of tax havens, such as Bermuda, Cayman Islands, Cyprus, and others were left off the list because these offshore communities have announced plans to eliminate harmful tax practices.