ICRICT welcomes a major UN report calling for overhaul of global financial system

You can download the press release in English here

En français : L’ICRICT salue le nouveau rapport des Nations Unies sur le financement durable en faveur d’une refonte du système financier mondial

En español : el ICRICT acoge con satisfacción el nuevo informe de la ONU que aboga por la revisión del sistema financiero global

For immediate release

04 April 2019

 ICRICT (the Independent Commission for the Reform of International Corporate Taxation) welcomes the fourth edition of United Nations “Financing for Sustainable Development Report 2019” finding that a failure to reshape both national and international financial systems will result in the failure of the international community to deliver the 2030 Agenda for Sustainable Development, including eliminating extreme poverty and combating climate change.

 One of the most important conclusions of the UN’s report is that “Tax revenues are insufficient, and tax rules are inadequate given digitalization” and “small and poor countries are not adequately included in international tax architecture reform efforts”.

 Current reforms have barely scratched the surface of the issue of tax avoidance and populations all over the world are growing tired of weak and partial answers. The UN report is published as the debate on the reform of the international tax system is in full swing as the work of the Organization for Economic Cooperation and Development (OECD), through the Inclusive Framework, on the challenges of taxing the digital economy continues. The OECD recently acknowledged that new solutions would have to move beyond the arm’s length principle. Further pressure has been put on the work of the OECD by the recent publication of by the International Monetary Fund (IMF) of a policy paper, “Corporate taxation in the global economy”, which recognized that the international corporate tax system is no longer fit for purpose.

 The most shocking aspect of multinational tax avoidance is the fact that it is legal. Multinationals fix the prices of transactions between their subsidiaries (so called transfer pricing/arm’s length pricing) to guarantee that their revenues are taxed in countries where tax rates are lower – and not where their economic activity and the creation of value really take place. This way, they are able to concentrate enormous profits in just a handful of tax havens thanks to a powerful industry of intermediaries – banks, consultants and law firms.

 As outlined in a previous report A roadmap to improve rules for taxing multinationals, the fairest and most effective approach is for multinationals to be taxed as single firms doing business across international borders.

A simple, formulaic approach would ensure that global profits and associated taxes could then be allocated according to objective factors such as the sales, employment, resources (and even digital users) used by the company in each country, rather where they locate their different functions and claim their Intellectual Property.

 This proposal, combined with a global effective minimum tax of 20-25% would drastically reduce the financial incentives for multinationals to shift profits between jurisdictions and for countries to cut their tax rates.

 Today’s reality is that the OECD is playing the leading role is shaping tax standards. In addition to our concerns on the legitimacy of the OECD vis a vis the United Nations, we are worried about the way developing countries are allowed to be engaged in the shaping of global tax standards. Given that corporate tax avoidance affects developing countries relatively more, it is critical that they become rule makers and not simply rule takers.

 ICRICT also calls for the creation of a global asset registry. It would prove a vital tool against illicit financial flows, by ending impunity for removing legitimate income and profits from the economy in which they arise for tax purposes. You can read about why, how and where it should be implemented in our latest report, “A Roadmap for a Global Asset Registry”.




  • IMF’s Fiscal Affairs Department estimates annual total corporate tax losses associated with profit shifting at around $600bn, with $400bn for OECD member states and around $200bn for lower-income countrie per annum.

  • According to ICRICT commissioner Gabriel Zucman, $7.6 trillion are stashed in tax havens. It is the equivalent of 10% of global GDP, hidden as deposits, shares, bonds and investment funds. And this is a conservative estimate, which also varies a lot per country: in northern European countries this hidden wealth is no more than 5%, but this figure goes up to around 15% in continental Europe, and even to 60% in Russia, some Gulf States and a few countries in Latin America.

  • Facebook paid just £7.4million of UK corporation tax in 2017, despite revenues of £1.3billion in the country and global profits before tax of 50%.

  • Amazon does not plan to pay any taxes in the US this tax season – the second year in a row it will not.

  • Google moved 19.9 billion euros ($22.7 billion) through a Dutch shell company to Bermuda in 2017, as part of an arrangement that allows it to reduce its foreign tax bill, according to documents filed at the Dutch Chamber of Commerce.

  • Vodafone, the first big multinational to voluntarily publish country by country data in its financial statements for 2016/2017, shows that nearly 40% of its profits are allocated to tax havens, with Eur1,4bn declared in Luxembourg, where the company provides intra-group services and funding, and is taxed at an effective tax rate of 0.3


Quotes of ICRICT commissioners (Please feel free to use them)

 Joseph Stiglitz, Professor at Columbia University and ICRICT Commissioner, said:

“It is time for countries to agree on a global minimum effective tax, no matter where you are producing, no matter what you do, you have to pay 15-20% of global profits in taxes. That would stop the race to the bottom”.

 José Antonio Ocampo, Chair of ICRICT, said:  

“The main responsibility for the issue of tax cooperation must lie with the United Nations, by turning the current Committee of Experts on International Cooperation in Tax Matters into a truly global intergovernmental organization, and allocating adequate resources for it to promote and improve global tax cooperation. ICRICT has also proposed that UN member states initiate negotiations to draft a UN convention to combat abusive tax practices.

 Wayne Swan, former Treasurer and a member of ICRICT, said:

“As the digital economy is fast becoming the economy itself, any solution should be comprehensive and deliver a sustainable international tax architecture fit for the 21st century. It means a rediscussion of taxing rights to deliver a fairer allocation of tax revenue than the current system, which has been stripping critical revenue from both developed and developing countries.”

 Magdalena Sepúlveda, a member of ICRICT, said:

“When multinationals do not pay the taxes that they owe, this means that States have fewer resources to invest in public services, such as education, health care, childcare services, access to efficient justice systems and access to public drinking water and sanitation systems. This dynamic exacerbates gender equality, because women are overrepresented among the poor and among the demographic group with precarious or low-paid jobs”.


ICRICT COMMISSIONERS VIDEOS      Watch - and publish if you wish:


- Joseph E. Sitglitz, Professor at Columbia University and ICRICT member on tax competition.

- Gabriel Zucman, Professor at Berkeley University and ICRICT member on tax havens

- José Antonio Ocampo, President of ICRICT, about the necessity of UN tax body

- Eva Joly, European MP and ICRICT member on tax avoidance and the devastation of the environment

- Jayati Ghosh, Professor of Economics at Jawaharlal Nehru University, New Delhi, and member of ICRICT on why fair tax is crucial for development.

- Magdalena Sepúlveda, ICRICT member, on tax avoidance and human rights.

- Wayne Swan, ICRICT member, on not reforming the global tax system and extremism


More ICRICT vidéos



The Independent Commission for the Reform of International Corporate Taxation aims to promote the international corporate tax reform debate through a wider and more inclusive discussion of international tax rules than is possible through any other existing forum; to consider reforms from a perspective of public interest rather than national advantage; and to seek fair, effective and sustainable tax solutions for development.



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You can download the press release here