Method and Concepts


The Corporate Tax Haven Index (CTHI) is a politically neutral ranking that relies on combining two core measures. The first is a Haven Score based on 20 mostly tax-related indicators of corporate tax haven-ness, assessing how aggressive a jurisdiction’s corporate tax haven laws and loopholes and relevant policies are. The second is a Global Scale Weight showing the scale or size of corporate investment activity as a proxy for the magnitude of the profit-shifting potential in that jurisdiction.

These two measures are mathematically combined to create a CTHI value for each jurisdiction, which is the basis of our ranking.

The full methodology is available here.

The 20 Haven Indicators

The Haven Indicators mostly use criteria that are similar to those identified by the IMF, the European Union, or by the OECD. Our 20 indicators can be grouped into five categories:

  • The lowest tax rate available to multinationals in that jurisdiction. Sometimes the headline rate of corporate tax is zero, as in the Cayman Islands. At other times, the headline rate is much higher but multinationals may be able to pay a much lower rate. The single indicator in this category is the Lowest Available Corporate Income Tax Rate (LACIT).
  • Loopholes and Gaps. Seven of our 20 indicators focus on what gets taxed and what gets excluded or carved out. Some income may be excluded from corporate tax, or there may be deductions that reduce the tax base. (Click here for more).
  • Transparency. Does the jurisdiction allow corporations to hide their financial affairs there? What kind of information must they file? Is it available to foreign tax authorities? Is it made public? The “transparency” score relies on six indicators. (Click here for more).
  • Anti-avoidance. This category rests on five indicators, and looks at defensive measures that the jurisdiction puts in place to constrain tax-dodging by multinational enterprises.
  • Double Tax Treaty Aggressiveness. When a multinational enterprise based in one jurisdiction invests in or earns income in another jurisdiction, the question arises as to which jurisdiction gets to tax it. Countries sign “Double Tax Treaties” to resolve these issues, so that the same income doesn’t get taxed twice. Treaties can be adjusted to help multinationals escape tax. This category relies on a single indicator, assessing how aggressively a jurisdiction uses tax treaties to lower the applicable withholding taxes that multinationals would have to pay when they send or receive income from abroad. (Click here for more).

In all five categories two themes recur: first, the tax rate; and second, the tax base: that is, what gets subjected to tax. We treat both as equivalent. To grasp the two concepts, look at the example below:


Global Scale Weight

The “Global Scale Weight” estimates how extensively multinationals are using that jurisdiction. Given that there is no actual data measuring this, the best available proxy we found to estimate this is data on Foreign Direct Investment (FDI) provided by the International Monetary Fund (IMF).

The Haven Score is then mathematically combined with the Scale Weight to create a final CTHI value for each jurisdiction, and the ranking is built from these final CTHI values (For more details on the methodology, click here).


The database

This database is the result of over a year of desk-based research by a dedicated team, and by numerous researchers around the globe. In terms of the cut-off date of information in the database, we generally relied on reports, legislation, regulation and news available as of December 31, 2018. For some indicators, more recent data has been included. For each country's database report we used up to 74 criteria (called "Info-IDs") that are combined into 20 Haven Indicators.

The database covers information on the legal, administrative, regulatory, and tax structures of the secrecy jurisdictions. The main data sources were official and public reports by the OECD, the associated Global Forum, the FATF, the IMF and the EU. In addition, specialist tax databases and websites such as by the IBFD, and "Big Four" accounting firms, and others have been consulted. 

Since each data source has differing objectives and layouts, combining them is a major undertaking.

The full database is here.

The assessment process: a higher standard

We believe that the standards, assessment procedures and conclusions used by bodies such as the Organisation for Economic Cooperation Development (OECD) and its Global Forum on tax and transparency are too lenient and likely to mislead the public about the true state of affairs.

For example, the Global Forum might commend a jurisdiction for requiring companies to file financial statements with a government authority but then they might note – often only between the lines – that this is not required of some types of companies. We, by contrast, require this of all companies.

More fundamentally, the OECD may refer to the statutory corporate income tax rate, but we apply a higher standard: we care about the corporate income tax rate that is actually available to multinational companies, which may be much lower or even zero. We always assess a jurisdiction based on the ‘lowest common denominator" or "weakest link" principle. So for example, if a jurisdiction offers three types of companies, two of which are required to publish financial statements online, but the third is not, then we assess the jurisdiction based on the least transparent case, because that's the one that will most likely attract the harmful corporate activity.

We first thoroughly checked all publicly available data sources. If we couldn't find a source, or it was of dubious quality, we registered the data as unknown, and this led to a negative rating. That's because for each of our 20 Haven Indicators, many countries did have relevant data available, showing up the loopholes. Lack of data is not evidence they are loophole-free: so the country should be assessed negatively until the data becomes available.

Given the sheer scale of this project, we have occasionally had to use reasoned judgement. Where this has happened, we have sought to be fully transparent about our criteria and reasons, with references to all sources used, and copious notes and supporting information.

The full document on the methodological background of the 20 Haven Indicators (HIs) can be downloaded here.

Methodology on our 20 Haven Indicators

Each of our 20 haven indicators is based on a number of criteria or components. (For example, our Haven Indicator 9 looks at whether company accounts are made public: for this, we need to know i) if the companies must keep accounting records; ii) if those records must be filed with a local authority, and iii) whether the records are published online.)

In total, the CTHI relied on 74 criteria to construct our 20 haven indicators (HIs). The choice of our indicators is necessarily subjective – but an objective list does not exist, and never will. We aimed to produce the next best thing: a list that is plausible, comprehensive, transparent and as short as possible.

Our indicators are designed to provide clear pointers for policy change to help jurisdictions become more transparent. Furthermore, we chose indicators that in principle are compatible with and support a transition of global corporate tax rules towards unitary taxation.

For a detailed analysis of each indicator click here; for the scale weightings click here. (These are also available on the Menu to the left).

If you disagree with CTHI data or scoring

We believe we have applied our methodology consistently and transparently, disclosing the underlying, fully referenced and cross-checked data. Nonetheless, given the complexity and sensitivity of the work, we accept that disputes may arise.

We are committed to addressing any issues, and warmly welcome engagement. If you believe that our data, or our scoring, contains errors, please contact us. The clearer and more detailed an explanation you are able to provide, the more easily we can consider the issue and respond accordingly.

Box: “You’ve treated my country unfairly!”

The CTHI (based on our experience with the FSI) may get attacked by tax havens. The most common attacks are below – here they are, with our generic responses.

“You are x-bashing” (e.g. “Bermuda-bashing.”)
  A: No we aren’t. We “bash” everyone. Check e.g. the Netherlands’ or the United Kingdom’s haven scores and ranking before levelling that accusation.
“We’ve been peer-reviewed by abc and they say we smell of roses!”
  A: We don’t use ‘accepted international standards’ as our benchmarks. We want things to improve, so we set a higher bar. Tough luck.
“You haven’t taken our xyz recent reform into account !”
  A: Nearly always, this is because we have a clear cut-off date (generally, December 31, 2018) to enable us to compare countries fairly. We give no special treatment on this. We’ll include your reforms in the next CTHI.
“There isn’t any data.”
  A: That may be because you’re focusing on the summary reports. You may want to consult the database reports, here.  (If you want political and economic context, narrative reports are available for larger jurisdictions, by clicking on the relevant country on the FSI list).