Public outcry over tax havens has increased in recent years. Journalists have shed light on the users of these offshore financial centres (OFCs), as well as the jurisdictions, banks, accountancy and law firms involved: OffshoreLeaks (2013), LuxLeaks (2014), SwissLeaks (2015), the Panama Papers (2015) and BahamasLeaks (2016).
OFCs are popular instruments for multinational corporations to (legally) reduce their tax bill by moving capital across borders in form of dividends, royalties and interests and taking advantage of loopholes in the legislation. By playing out one state against another corporations reduce their tax rate from around 35% to 15-25% (and some much lower). For instance, Apple uses a combination of subsidiaries in Ireland, the Netherlands and Bermuda to strongly reduce its tax payments in Europe to a stunning 0.005% in 2014 according to the European Comission.