19:59 10 September 2019
Phantom capital reduces tax revenues - FT
A large proportion of the world’s stock of foreign direct investment is “phantom” capital, designed to minimize companies’ tax liabilities rather than financing productive activity, according to a study by the International Monetary Fund and the University of Copenhagen, the Financial Times wrote.
Almost 40 percent of global FDI, worth a total of $15 trillion, “passes through empty corporate shells” with “no real business activities”. Instead, they are a vehicle for financial engineering, often to minimize multinationals’ global tax bill”, said researchers Jannick Damgaard, Thomas Elkjaer, and Niels Johannesen, who carried out the study. What's more, the scale of the problem is growing quickly.
(300Sekund)
