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UK’s ‘tax haven empire’ costs the EU $9 billion a year
The Tax Justice Network says UK-linked overseas territories and Crown dependencies are among the world’s most harmful jurisdictions for corporate taxation, costing EU countries about €8 billion ($9 billion) in lost revenue each year. Its latest Corporate Tax Haven Index estimates this impact for the first time and describes the jurisdictions as a network linked to the City of London.
The British Virgin Islands, Cayman Islands and Bermuda rank first, second and third, accounting for 7%, 6.7% and 5.4% of global corporate tax abuse respectively. France and Germany are the most affected EU countries, with estimated annual losses of €1.41 billion and €2.79 billion; the Netherlands, Ireland and Luxembourg also appear in the top 10. The index assesses tax rules and multinational investment flows, while none of its top 10 jurisdictions appear on the EU’s tax blacklist.
In short
- UK-linked jurisdictions are estimated to cost EU states €8 billion yearly.
- The British Virgin Islands, Cayman Islands and Bermuda top the index.
- France and Germany face the largest losses among EU countries.
Steelman: both sides, in good faith
The strongest fair case each way — we don't pick a winner.
The case for
The Tax Justice Network’s findings suggest that UK-linked jurisdictions facilitate corporate tax avoidance on a scale that deprives European governments of substantial revenue. Supporters of stronger controls argue that this weakens the ability to fund public services and shifts the tax burden towards businesses and individuals with fewer opportunities to move profits across borders; they see the jurisdictions’ links to the City of London as grounds for UK responsibility and coordinated EU action.
The case against
The index estimates tax abuse using rules and investment flows, so its rankings do not by themselves establish that all identified activity is unlawful or that the UK government is directly responsible for the estimated losses. Defenders of these jurisdictions may argue that legitimate differences in tax systems and cross-border investment should not be treated as wrongdoing, and that any response should distinguish lawful competition from evasion while relying on transparent, consistently applied evidence.