The ‘Mistreated’ report is based on research that has for the first time examined more than 500 international tax treaties that low and lower-middle income countries in Eastern and Southern Asia and Sub-Saharan Africa have signed from 1970 until 2014.
We commissioned research scoring how much a tax treaty restricts the way that the lower income country can levy profit tax, withholding tax and other taxing rights including capital gains tax.
While all tax treaties restrict the rights of lower income countries to tax foreign companies making money on their soil, ActionAid is particularly concerned about the bottom half – those treaties which are more restrictive than the norm.
The research reveals which lower income countries have most given up their power to tax global companies - and which richer countries have most often signed very restrictive treaties with their lower income partners. These are the treaties we believe governments should most urgently reconsider.
The research also shows how tax treaties in practice favour wealthier countries, taking away more taxing rights from poorer countries, and that some treaties result in multinational companies not paying certain types of tax at all in any country, reducing corporation tax collected globally.
The most aggressive tax treaties ensure that money flows untaxed from poor to rich countries,
worsening global inequality. ActionAid would much rather see that this money
was spent where it is needed most on healthcare, schools and other essential public services.
Tax treaties have so far received little public scrutiny – but now we hope that everyone will be able to clearly see which modern treaties their country has signed that dramatically limit their ability to tax multinational companies, and compare it to neighbouring countries.
ActionAid is calling on Governments to urgently reconsider very restrictive treaties as a priority, to ensure multinational companies pay their fair share of tax in lower income countries.
Please join us in calling for better tax treaties. You can:
- See for yourself the very restrictive tax treaties that countries have signed in our interactive map
- Read our http://www.actionaid.org/tax-power
- See the methodology used to score each treaty (Hearson, M. 2016. The ActionAid Tax Treaties dataset. Brighton: International Centre for Tax and Development)
- See the full ActionAid Tax Treaties dataset
- Re-tweet/share our social media posts
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Join the conversation using the hashtag #taxpower or #taxpaysfor Thanks go to Martin Hearson for the treaty analyses, and Nadia Harrison and Lovisa Moller, authors of the report.
