Tag: Panama

Uncovering Low Tax Jurisdictions and Conduit Jurisdictions

Uncovering Low Tax Jurisdictions and Conduit Jurisdictions

By Javier Garcia-Bernardo, Jan Fichtner, Frank W. Takes, & Eelke M. Heemskerk Multinational corporations use highly complex structures of parents and subsidiaries to organize their operations and ownership. Offshore Financial Centers (OFCs) facilitate these structures through low taxation and lenient regulation, but are increasingly under scrutiny, for instance for enabling tax avoidance. Therefore, the identifcation of OFC jurisdictions has become a politicized and contested issue. We introduce a novel data-driven approach for identifying OFCs based on the global corporate ownership network, in which over 98 million firms (nodes) are connected through 71 million ownership relations. This granular firm-level network data uniquely allows identifying both sink-OFCs and conduit-OFCs. Sink-OFCs attract and retain foreign capital while conduit-OFCs are attractive intermediate destinations in the routing of international investments and enable the transfer of capital without taxation. We identify 24 sink-OFCs. In addition, a small set of countries – the Netherlands, the United Kingdom, Ireland, Singapore and Switzerland – canalize the majority of corporate ... Continue to full case
Japan vs Imabari Shipbuilding Co. Ltd., October 2006, Takamatsu High Court, Case No. 17

Japan vs Imabari Shipbuilding Co. Ltd., October 2006, Takamatsu High Court, Case No. 17

Imabari Shipbuilding Co.Ltd., was a Japanese shipbuilding company constructing ships for an affiliate company located in Panama, Panama S.A. The Japanese tax authorities found that prices used in transactions between Imabari Co. and Panama S.A. had not been at arm’s length. A tax assessment was therefore issued where the pricing was based on the comparable uncontrolled pricing method (CUP). Imabari disagreed with the assessement and filed an appeal. At trial, the Takamatsu High Court rejected Imabari’s claim and held that the tax authority’s analysis could be limited to the factors that significantly affected the price, and that not all differences were required to be considered in the calculation of the arm’s length price. A final appeal to the Supreme Court was dismissed 14 April 2007. Click here for translation Shipbuilding-Oct-2006-034729_hanrei ... Continue to full case