Harmful tax practices

This category is based on information from table 2 on ‘Offshore financial centres – top five’ (see chapter 3.1 on ‘Which offshore financial centres are multinationals using?’); box 7 on ‘EU member states with patent boxes’ (see chapter 4.3.1 ‘Here to stay?’); table 3 on ‘’Sweetheart deals’ in force’ (see chapter 4.4.2 on ‘Advance pricing agreements in the EU and Norway’); chapter 4.2.1 on ‘What are special purpose entities’; and information provided in the national chapters. For the European Parliament and Commission, the category is generally based on chapter 4 on ‘Potentially harmful tax practices’.

Green
The country does not have a patent box and the level of investment activity through special purpose entities is low. The country also does not have a significant number of unilateral advance pricing agreements with multinational corporations (i.e. between 0-20 agreements in force). This category is also used for EU institutions that have shown strong opposition to patent boxes, letterbox companies, and secret advance tax agreements between governments and multinational corporations.
Yellow
The country is not among the world’s biggest sink or conduit countries, and does not have a patent box. But it has a significant level of investments going through special purpose entities and/or a significant number of unilateral advance pricing agreements with multinational corporations (i.e. between 21-100 agreements). This category is also used for EU institutions that have taken a position in-between opposing and promoting harmful tax practices.
Red
This category includes countries that are among the world’s top five biggest sink or conduit countries and/or have a patent box. This category also includes countries that have more than 100 unilateral advance pricing agreements with multinational corporations, or have introduced tax policies which allow a corporate tax rate of zero for multinational corporations that retain their earnings. Lastly, the category includes EU institutions that have promoted patent boxes, letterbox companies or secret advance tax agreements between governments and multinational corporations.
Arrows: Show that a country seems to be in the process of moving from one category to another. The colour of the arrow denotes the category being moved towards.
  Restricted access sign: Shows that the position of the government is not available to the public, and thus the country has been given a yellow light due to a lack of information.