Every woman/girl has the capacity to challenge oppression. Women aren't just victims of their own circumstances and patriarchy but are active participants in their own change – Active Change Agents.
As part of expression of agency, every woman has the right to make decisions regarding her life, body, sexuality, gender identity, labour and reproduction. The choice is made through social, political, and economic conditions.
Anti-Money Laundering Directive (AMLD)
A European Union (EU) directive regulating issues related to money laundering and terrorist financing, including public access to information about the beneficial owners of companies, trusts and similar legal structures. The 4th AMLD was adopted in May 2015, and it is expected that a 5th AMLD was adopted during 2017.
Article IV consultations
The IMF has a mandate under Article IV of its Articles of Agreement to closely monitor the exchange rate policies of its members. This requires a comprehensive analysis of the general economic situation of each member, as well as its main policy orientation. Article IV consultations take place usually once a year. After having visited the concerned country and met with the relevant officials, IMF staff submits a report to the Executive Board for discussion. The Board opinions are thereafter forwarded to the concerned country.
Automatic Exchange of Information
A system by which relevant information about the wealth and income of a taxpayer – individual or company – is automatically passed by the country where the income is earned to the taxpayer’s country of residence. As a result, the tax authority of a tax payer’s country of residence can check its tax records to verify that the taxpayer has accurately reported their foreign-source income.
Base Erosion and Profit Shifting
This term is used by the OECD and others to describe the shifting of taxable income out of countries where the income was earned, usually to zero- or low-tax countries, which results in ‘erosion’ of the tax base of the countries affected, and therefore reduces their revenues.
A legal term used to describe anyone who has the benefit of ownership of an asset (for example, bank account, trust, property) and yet nominally does not own the asset because it is registered under another name.
Common Consolidated Corporate Tax Base (CCCTB)
CCCTB is a proposal that was first launched by the European Commission in 2011. It entails a common EU system for calculating the taxable profits of multinational corporations operating in the EU, and dividing this among the EU
member states based on a formula to assess the level of business activity in each country. The proposal does not specify what tax rate the member states should apply to the taxable profits, but simply allocates it and leaves it to
the member state to decide what tax to apply. The proposal was redrafted and relaunched in 2016 (see chapter 5.2 on ‘A coherent system for taxing multinationals’).
Economic policies or structural reforms that [borrowing] members agree to follow as a condition for the use of IMF and World Bank resources [loans] often called performance criteria or benchmarks.
Controlled Foreign Company (CFC) rules
CFC rules allow countries to limit profit shifting by multinational corporations by requesting that the corporation reports on profits made in other jurisdictions where it ‘controls’ another corporate structure. There are many different types of CFC rules, with different definitions of which kind of jurisdictions and incomes are covered.
Corporate income tax
When corporations make profits, governments generally seek to levy a portion of those profits as tax, to ensure the corporation pays its fair share towards the public services and protections that have contributed towards those profits. It is generally assessed on the basis of net profits: that is, profits after costs have been deducted. Typical corporation tax rates in countries that are not tax havens range between 20 and 35 percent.
Country Policy and Institutional Assessment (CPIA)
Rates countries against a set of 16 criteria grouped in four clusters: (a) economic management; (b) structural policies; (c) policies for social inclusion and equity; and (d) public sector management and institutions. CPIA determines the level and composition of aid transfers to different recipients.
Country-by-country reporting would require multinational companies to provide a breakdown of profits earned and taxes paid in every country where they have subsidiaries, including offshore jurisdictions. Ideally it would require disclosure of the following information by each multinational corporation in its annual financial statement:
- A global overview of the corporation (or group): The name of each country where it operates and the names of all its subsidiary companies trading in each country of operation.
- The financial performance of the group in every country where it operates, making the distinction between sales within the group and to other companies, including profits, sales, purchases and labour costs.
- The assets: All the property the company owns in that country, its value and cost to maintain.
- Tax information i.e. full details of the amounts owed and actually paid for each specific tax.
Taxes that are charged on physical or legal persons directly upon their salary, profits, dividends, rents of other types of income.
These are taxes usually imposed on a limited range of goods, such as luxury goods, or on products that can have a harmful impact on the consumer and or society.
Tax levied on exports of basic commodities entering into world trade, such as rubber, copper, palm oil, sisal, tea, cocoa and coffee
Economic consequences beyond the specific beneficiary of the tax incentive.
Feminism can be looked at as an ideology, an analytical framework or as a social change strategy:
- As an ideology feminism stands not only for gender equality but for the transformation of all social relations of power that discriminate people on the basis of their gender, age, sexual orientation, ability, race, religion, nationality, location, ability, class, caste or ethnicity. It also stands for equal worth of every person. The transformation has to happen because relations of power naturalize hierarchies dependent on the idea of some people being worth more than others.
- As an analytical framework, feminism looks at researched issues by applying the concepts of patriarchy (a system which privileges men and masculinity over women and femininity in political, economic, social and cultural structures), gender and power relations
- As a social change strategy, feminism prioritises the empowerment of women and gender non-conforming people and the transformation of gender power relations.
Financial Action Task Force (FATF)
The Financial Action Task Force is the independent inter-governmental body that develops and promotes policies to protect the global financial system against money laundering, terrorist financing and the financing of proliferation of weapons of mass destruction.
It refers to socially and culturally constructed norms, values and expectations related to men or women, boys or girls. Gender also refers to attitudes and behaviours related to what is regarded as masculine or feminine.
Gender Equality is the state or condition that affords women and men equal enjoyment of human rights, socially valued goods, opportunities, and resources.
Gender Equity is the process of being fair to women and men. To ensure fairness, measures must be taken to compensate for historical and social disadvantages that prevent women and men from operating on a level playing field.
Gender Mainstreaming is the process of incorporating a gender perspective into policies, strategies, programs, project activities, and administrative functions, as well as into the institutional culture of an organization.
General Anti-Avoidance Rule (GAAR)
GAAR refers to a broad set of different types of rules aimed at limiting tax avoidance by multinational corporations in cases where abuse of tax rules has been detected. When used in tax treaties, GAARs can in some cases be used to prevent tax avoidance by allowing tax administrations to deny multinational corporations tax exemptions, but they do not address the general problem of lowering of withholding taxes through tax treaties, nor do they address the general division of taxing rights between nations (source).
Harmful tax practices
Harmful tax practices are policies that have negative spillover effects on taxation in other countries, for example, by eroding tax bases or distorting investments.
Illicit financial flows
There are several definitions of illicit financial flows. It can refer to unrecorded private financial outflows involving capital that is illegally earned, transferred or utilised. In a broader sense, illicit financial flows can also be used to describe revenue losses as the result of artificial arrangements that have been put in place with the purpose of circumventing the law or its spirit, such as aggressive tax planning.
Taxes on income, profits, inheritance, payroll and capital gains are generally divided between taxes payable by individuals and corporations.
A form of tax charged upon transactions, usually on their gross value. Examples include sales taxes, value added taxes, goods and services taxes, stamp duties, land taxes, excise and customs duties, and levies of all sorts.
Intersectionality is a tool for analysis, advocacy and policy development that addresses multiple discriminations and helps us understand how different sets of identities impact on access to rights and opportunities
The Laundromat scandal first surfaced in 2014, but received renewed attention in 2017, when the Organized Crime and Corruption Reporting Project (OCCRP) published a series of articles on a large-scale money laundering operation. The scheme operated from 2010-2014, and allegedly brought at least US$20 billion out of Russia and into banks around the world. According to the media reports, the money laundering in many cases involved shell companies registered in the UK with nominee directors concealing the real owner (see ‘Beneficial owner’ above). A core method in the scheme was for Russian ownership to guarantee large fake loans between two shell companies. When one shell company failed to repay the fake debt to the other, the loan would get authenticated by judges in Moldova, at which point the Russian company would be able to transfer money out of Russia under the pretence of covering unpaid debt. The scandal has among other things led to money laundering charges against a number of judges in Moldova for their alleged involvement in the scheme. It has also led to criticism of a number of international banks for their failure to detect suspicious transactions (source).
The LuxLeaks (or Luxembourg Leaks) scandal surfaced in November 2014 when the International Consortium of Investigative Journalists (ICIJ) exposed several hundred secret tax rulings from Luxembourg, which had been leaked
by former employees of PricewaterhouseCoopers (PwC). The LuxLeaks dossier allegedly documented how hundreds of multinational corporations were using the system in Luxembourg to lower their tax rates, in some cases to less than one per cent (source).
In 2017, the network of European Investigative Collaborations (EIC) published a series of articles based on hundreds of thousands of documents, including details about over 70,000 companies registered in Malta’s public
company register. The investigation allegedly showed that Malta operates as a hub for corporate tax avoidance inside the EU and has, among other things, cost other countries €2 billion in lost tax income. The scandal also concluded that the Maltese system is being used by wealthy individuals to dodge taxes in their home countries (source).
Legislation governing the mining policy in a country this may include the taxes applied to mining companies as well as any exemptions and customs regulations.
OECD BEPS Convention
A convention to implement the treaty-related parts of the outcomes of the OECD BEPS process (see below). Also known as the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent BEPS or simply the Multilateral Legal Instrument (MLI).
OECD BEPS process
Intergovernmental negotiating process initiated in 2013 with the aim of producing an agreed outcome on how to address base erosion and profit shifting (see above). The process was led by the Organisation for Economic Co-operation and Development (OECD) and the Group of 20 (G20), and produced the ‘BEPS package’, consisting of 15 agreed actions.
Offshore jurisdictions or centres
Usually known as low-tax jurisdictions specialising in providing corporate and commercial services to non-resident offshore companies and individuals that aim to avoid or evade taxes, and for the investment of offshore funds. This is often combined with a certain degree of secrecy (see more on secrecy in the Financial Secrecy Index). ‘Offshore’ can be used as another word for tax havens or secrecy jurisdictions. Offshore jurisdictions are sometimes divided into ‘sinks’, which are jurisdictions that attract and retain foreign capital, and ‘conduits’, which function as intermediates between source countries and sinks by enabling the transfer of capital without taxation.
The Panama Papers scandal broke in April 2016 when the International Consortium of Investigative Journalists (ICIJ) exposed hidden wealth and financial activities of political leaders, drug traffickers, celebrities, billionaires, and others. The core of the scandal was 11.5 million leaked files from the Panamanian law firm Mossack Fonseca, which revealed information about more than 214,000 secret companies hidden in 21 different offshore jurisdictions. These companies were linked to individuals in more than 200 countries and territories worldwide. The scandal allegedly revealed that secret companies had, among other things, been used for tax evasion, corruption, fraud and money laundering (source).
The Paradise Papers scandal broke on 5 November 2017 when the ICIJ once again exposed the hidden world of tax havens. The leak had ties to over 120 politicians and world leaders, more than 100 multinational corporations, and
countless wealthy individuals, spread over 180 countries. At the core of the stories were 13.4 million leaked files, mainly originating from the law company Appleby, the trust company Asiaciti, and company registers in 19 secrecy jurisdictions (source).
A ‘patent box’, ‘innovation box’, ‘intellectual property (IP) box’ or ‘knowledge box’ is a special tax regime that includes tax exemptions or deductions for activities related to research, innovation or intellectual property. These regimes have often been labelled a type of ‘harmful tax practice’, since they have been used by multinational corporations to avoid taxation by shifting profits out of the countries where they do business and into a patent box in a foreign country, where the profits are taxed at very low levels or not at all (source).
A system of social organisation where power is held by and passed down through the male line. It refers to societies where male power and privilege is the organising principle in all institutions and relationships, public and private.
Poverty Reduction and Growth Facility (PRGF)
IMF’s low-interest lending facility for lowincome countries. Concessional lending under the PRGF is administered by the IMF through the PRGF-ESF and PRGF-HIPC Trusts. Eligibility is based on the IMF’s assessment of a country’s per capita income.
Poverty and Social Impact Analysis (PSIA)
Analysis of the distributional impact of policy reforms on the well-being or welfare of the poor and vulnerable. In theory, PSIA should have an important role in the elaboration and implementation of poverty reduction strategies in developing countries, promoting evidence-based policy choices and fostering debate on policy reform options.
A predicate offence is a crime that, as a matter of logic or statutory provision, is or must be a part of another crime.
A tax system in which, as incomes rises, the amount of tax paid increases in proportion to the income as well as in absolute amount, that is the percentage tax rate increases as the income rises.
A group of taxes imposed on property owned by individuals and businesses based on the assessed value of each property.
Public/Private Dichotomy (gender)
Patriarchal society is split between the public and private spheres and most women’s/girl’s rights are violated in the private; through reproduction; unpaid and cheap labour and domesticity of labour.
A decreasing proportion of income is paid in tax as income increases.
Tax imposed as a percentage of the price of goods (and sometimes services). The tax is generally paid by the buyer but the seller is responsible for collecting and remitting the tax to the tax authorities. This can include multi-stage cumulative taxes (also known as cascade taxes) where tax is levied each time a transaction takes place without any deduction for tax paid on inputs.
Special purpose entity
Special purpose entities, in some countries known as special purpose vehicles or special financial institutions, are legal entities constructed to fulfil a narrow and specific purpose.
Special purpose entities are used to channel funds to and from third countries, and are commonly established in countries that provide specific tax benefits for such entities.
The Swiss Leaks scandal broke out in 2015 when the International Consortium of Investigative Journalists (ICIJ) exposed 60,000 leaked files with details about more than 100,000 clients of the bank HSBC in Switzerland. Among other things, the data allegedly showed how HSBC was helping clients set up secret bank accounts to hide fortunes from tax authorities around the world, and assisting individuals engaged in arms trafficking, blood diamonds and corruption to hide their illicitly acquired assets (source).
Tax planning practices that are often technically legal, but which stretch existing rules to their limits, or exploit loopholes, to minimise tax payments. Tax avoidance activities often go against the spirit of the law, although they may comply with the letter of the law.
The pressure on governments to reduce taxes, usually to attract investment, either by way of reduction in declared tax rates or through the granting of special allowances and incentives.
Payment of tax due without engaging in tax avoidance or evasion.
Illegal activity that results in not paying or under-paying taxes.
Territory whose laws may be used to avoid or evade taxes. The Organisation for Economic Cooperation and Development defines them as jurisdictions where:
1. Non-residents undertaking activities pay little or no tax;
2. There is no effective exchange of taxation information with other countries;
3. A lack of transparency is legally guaranteed to the organisations based there;
4. There is no requirement that local corporations owned by non-residents carry out any substantial domestic activity. Not all of these criteria need to apply for a territory to be a haven, but a majority must.
A tax ruling is a written interpretation of the law issued by a tax administration to a taxpayer. It is in most cases binding for the tax administration that issues it. Tax rulings cover a broad set of written statements, many of which are uncontroversial. However, those rulings that are so-called ‘advance tax agreements’ with multinational corporations have become an issue of much debate. One such type of agreement are the so-called advance pricing agreements (APAs), which are used by multinational corporations to get approval of their transfer pricing methods. Advance pricing agreements and other advance tax agreements have become increasingly controversial after the LuxLeaks scandal, as well as several EU state aid cases, showing how such deals can be used by multinational corporations to avoid taxes on a large scale.
A legal agreement between jurisdictions to determine the cross-border tax regulation and means of cooperation between them. Bilateral tax treaties often revolve around questions about which of the jurisdictions has the right to tax cross-border activities and at what rate. Tax treaties can also include provisions for the exchange of tax information between the jurisdictions, but for the purpose of this report treaties that only relate to information exchange (so called Tax Information Exchange Agreements (TIEA)) are considered to be something separate from tax treaties that regulate cross-border taxation. TIEAs are therefore not included in the term tax treaty in this report.
Tax-related capital flight
Tax-related capital flight is defined as the process whereby wealth holders perform activities to ensure the transfer of their funds and other assets offshore rather than in the banks of their country of residence and thereby avoid or evade taxation in the country where the wealth is generated. The result is that assets and income are often not declared for tax purposes in the country where a person resides or where a company has generated this wealth. Capital flight, tax evasion and tax avoidance or ‘aggressive tax planning’, are intimately linked phenomena.
The Personal is Political
Or The Private is Political is a strong and provocative feminist outcry of activists from the second wave of feminism. It has since been associated with the feminist movement and has been used to challenge existing notion of the hierarchy between political and personal, and to emphasize the fact that deeply personal experiences are often shaped by existing political structures.
When different subsidiaries of the same multinational corporation buy and sell goods and services between themselves at manipulated prices, with the intention of shifting profits into low-tax jurisdictions. Trades between subsidiaries of the same multinational corporation are supposed to take place ‘at arm’s length’, i.e. based on prices on the open market. Market prices can be difficult to quantify, however, particularly with respect to the sale of intangible assets such as services or intellectual property rights.
A transfer price is the price charged by a company for goods, services or intangible property to a subsidiary or other related company. Abusive transfer pricing occurs when income and expenses are improperly allocated for the purpose of reducing taxable income.
Transparency is a method to ensure public accountability by providing public insight into matters that are or can be of public interest.
Specific type of turnover tax levied at each stage in the production and distribution process.
Although VAT ultimately bears on individual consumption of goods or services, liability for VAT is on the supplier of goods or services. VAT normally utilizes a system of tax credits to place the ultimate and real burden of the tax on the final consumer and to relieve the intermediaries of any final tax cost.
A whistleblower is a person who reports or discloses confidential information with the aim of bringing into the open information on activities that have harmed or threaten the public interest.
The process, and outcome of the process, by which marginalized women become conscious of the root causes of their subordination, construct their own agendas of change, organise collectively seeking to create fundamental and lasting transformations in both gender and other social power structures, to create a more just social and economic order.