More Information on the Harmful Tax Practices Work

The work was launched with the publication of the 1998 report entitled “Harmful Tax Competition: An Emerging Global Issue.” This report divided the work into three areas (member country preferential regimes, tax havens, non-member economies) and developed criteria to identify harmful tax practices. There are four main criteria for identifying harmful tax practices both in the context of preferential regimes  and tax havens. The Report makes clear that while “no or low tax” is a gateway criterion to determine whether further analysis is necessary it does not itself constitute a harmful tax practice. The project has evolved over time and the modifications are set out in a series of progress reports:

The first progress report issued in June 2000 identified, among other things, 47 potentially harmful regimes within OECD member countries as well as 35 jurisdictions found to have met the technical tax haven criteria. A second progress report was released in 2001. It made several modifications to the tax haven work. Most importantly, it provided that commitments would only be sought with respect to the principles of transparency and effective exchange of information. A third progress report was issued in early 2004. It summarised the progress made in the work of the Participating Partners and showed that of 47 regimes identified in the 2000 report 45 have been abolished, amended or found not to be harmful following further analysis.