Index
All guides
Every published page, grouped by section. The complete index, so nothing on this site is unreachable.
Cornerstones
- Is it fair? In five of six countries, the small business pays the higher rate
In five of the six countries on this site a small business pays a higher effective tax rate than a large multinational. It is all legal. Here is the decade gap, what it could have funded, and how far it goes beyond six companies.
- What you pay versus what they pay
A self-employed tradesperson can pay double the effective rate of a global giant. The gap is legal. Here is the honest version, caveats first.
- Why your small business pays a higher tax rate than a multinational
A small UK firm often pays a higher effective tax rate than a global giant. The arithmetic, the mechanism behind the gap, and why it is all perfectly legal.
How it works
- How big multinationals pay less tax than your local trades firm: the whole toolkit in plain English
Six legal tools let multinationals shift profit to where tax is lowest. Here is each one, how it works, and why it is out of your reach.
- Conduit jurisdictions: the countries that are just a stop on the way
Some countries are not where the money ends up, just where it passes through to dodge withholding tax. How conduits, treaty shopping and hybrid mismatches work.
- Debt and interest: how a loan within the group turns profit into a tax deduction
Interest is tax-deductible. Load a high-tax subsidiary with group debt, pay interest to a low-tax lender, and the profit is stripped out. How it works and how it is capped.
- IP and royalties: how a brand owned offshore collects the profit
Patents and brands have no fixed home. Park them in a low-tax entity, charge royalties worldwide, and profit follows. Including the Double Irish, now closed.
- Profit shifting and BEPS: the scale of it, in numbers that hold up
How much profit multinationals move to low-tax countries, what it costs governments, and which verified figures actually stand behind the headlines.
- Transfer pricing: how a company sets its own prices when it sells to itself
Multinationals price their internal trades, and that price decides which country gets the profit. How it works, legally, and the limits of policing it.
The league table
By the numbers
Country comparisons
- The Australia comparison: a self-employed electrician versus the six biggest tech firms
An Australian electrician on A$90,000 pays 21.8% all-in. The six biggest tech firms averaged 18.8% globally over a decade. The working, both caveats.
- The Canada comparison: a self-employed electrician versus a global multinational
A self-employed electrician in Ontario on C$100,000 pays 28.3% all-in, about 1.5 times a global multinational's rate. Inside a CCPC the same profit pays 12.2%. The working, both caveats.
- The India comparison: a self-employed professional versus a large domestic company
An Indian sole trader on 12 lakh pays nothing, on 24 lakh pays 13.0%, on 1 crore pays 29.5%. A large company pays 25.17%. The full working, and why India is the country where the gap mostly runs the other way.
- The South Africa comparison: a self-employed professional versus a global multinational
A South African sole trader on R600,000 pays 22.2%, about 1.2 times a global multinational's rate. The full working, both caveats, the small-company comparison and the standard-27% nuance.
- The UK comparison: a self-employed electrician versus a global online retailer
A UK electrician on £75,000 pays 26.9% all-in. A global online retailer's 2024 accounts show 13.5% globally. The full working, with both caveats.
- The US comparison: a self-employed plumber versus Big Tech
A US plumber on $60,000 pays 25.4% all-in. Four tech giants paid 4.9% federal on $315bn. The working, scope and measure caveats included.
Country pages
- The same gap, six tax systems
How the multinational tax gap plays out in the UK, US, Canada, Australia, India and South Africa: the landmark cases, what each country loses, and what its rules do about it.
- Australia: two of the toughest laws, leaked from the inside
How Australia's multinational tax gap works: the MAAL and Diverted Profits Tax, the Senate inquiry, the consulting-firm leak scandal, and a $22.1bn loss worth about 1.4% of GDP.
- Canada: the scheme, the firm that walked away, and the tax that was scrapped overnight
How Canada's multinational tax gap works: the Big Four firm's Isle of Man affair, the 2023 to 2024 GAAR overhaul, the digital-services tax dropped under US pressure, and an $8.9bn loss.
- India: the tax it imposed, lost, and repealed
How India's multinational tax gap works: the telecoms and energy retrospective-tax saga, GAAR and the 2026 Supreme Court treaty ruling, the Mauritius route, and a $21.4bn loss.
- South Africa: a statutory anti-avoidance rule, a concentrated profit-shifting problem, and a split for small firms
How South Africa's multinational tax gap works: the section 80A to 80L general anti-avoidance rule, the small business corporation scale, the UNU-WIDER profit-shifting estimate, and what it means for small firms.
- The United Kingdom: the hearings that built a tax
How the UK's multinational tax gap works: the 2012 PAC hearings, the Diverted Profits Tax, Pillar Two, and the £16.9bn the UK loses each year.
- The United States: the biggest loser, and the reason the global deal stalled
How the US multinational tax gap works: the 2013 Senate hearings on a major tech group, GILTI/NCTI, BEAT and FDII after OBBBA, the Pillar Two standoff, and a $32.6bn yearly loss.
Structures, A to Z
- The Named Tax Structures, Explained: Double Irish, Dutch Sandwich, Single Malt and the Rest
How the big named tax structures actually work, step by step. Most were legal. Several are now closed. Here is which, and when.
- Corporate Inversions, Explained
How a US company adopts a foreign tax address by merging with a smaller foreign firm. The mechanism, the restrictions since 2004, and why the 2017 tax cut largely ended them.
- The CV/BV Structure, Explained
A Dutch hybrid that fell into the gap between Dutch and US tax law and was taxed by neither. How the CV/BV worked and when the Netherlands closed it for good in 2025.
- The Double Irish, Explained
The most famous tax structure ever built. How the Double Irish moved profit to Bermuda untaxed, who used it, and exactly when it closed.
- The Dutch Sandwich, Explained
Not a structure on its own, but the Dutch layer slotted into the Double Irish to strip out a withholding tax. How it worked and when the Netherlands closed it.
- Earnings Stripping, Explained
The simplest structure of all: load a company with debt to a low-tax parent so the interest eats the profit. How it works and the caps that now limit it.
- The Green Jersey, Explained
Ireland's reply to losing the Double Irish. How the Green Jersey wipes out Irish tax using a capital allowance on intangible assets, and why it is still on the books.
- The Killer B, Explained
A triangular share reshuffle that let a foreign group bring offshore cash into the US without paying the dividend tax. How it worked and when US regulations closed it in 2024.
- Round-Tripping, Explained
Send your own money offshore, then bring it home dressed as foreign investment to claim the breaks foreigners get. How round-tripping worked through Mauritius into India, and how it was constrained.
- The Single Malt, Explained
The Double Irish's successor. How the Single Malt used an Ireland-Malta treaty gap to do the same job, and when Ireland and Malta closed it in 2018.
Beyond the companies
- Beyond the companies: the owners of capital, and the people who write the rules
Corporate profit shifting is only half the story. The other half is how wealthy owners are taxed, and who shapes the tax rules in the first place.
- Who shapes the rules: lobbying, the revolving door, and the Australian tax-leak scandal
The documented public record of who reaches UK tax policy: lobbying access, Treasury-to-finance moves, and the Big Four tax-leak scandal in Australia. Registers and inquiries only.
- Non-dom status and carried interest: two ways personal wealth was taxed more gently than your wages
The UK non-dom regime, abolished April 2025, and carried interest taxed as a capital gain. Two personal-wealth advantages, in plain numbers, and what changed.
- The private equity model: how borrowing to buy a company turns its tax bill into a deduction
Private equity's tax advantages, in plain English: loading the acquired company with debt, carried interest, fee waivers, and the offshore fund. The leveraged model decoded.
- Who really pays when giants pay less: the contested arithmetic of tax incidence
When mobile capital pays less tax, the burden shifts. To labour, to consumers, or to small firms? The genuine economic debate, set out fairly, and the payoff.
Glossary
- Tax-avoidance glossary: 31 terms in plain English
Plain-English definitions of the tax terms behind why big multinationals pay near-zero while small firms pay full freight. Verified figures.
- Arm's-length principle
The rule that deals between companies in the same group must be priced as if the two sides were independent, unconnected businesses.
- Base erosion
Shrinking a country's taxable profit base by making deductible payments (interest, royalties, fees) to a related company in a lower-tax country.
- BEAT (Base Erosion and Anti-Abuse Tax)
A US minimum tax on large corporations that make big deductible payments to foreign affiliates. Set permanently at 10.5% under the 2025 OBBBA.
- BEPS (Base Erosion and Profit Shifting)
The OECD/G20 reform project, and the umbrella term, for how multinationals exploit gaps between countries' tax rules. 15 actions delivered by 2015.
- CFC rules (Controlled Foreign Company)
Rules that let a country tax its own companies on the profit of their low-taxed foreign subsidiaries, to stop profit being parked offshore indefinitely.
- Conduit jurisdiction
A pass-through country used to cut withholding tax on money moving toward a haven. The Netherlands, Luxembourg and Ireland are the classic conduits.
- Country-by-country reporting (CbCR)
A rule making big multinationals report, per country, their revenue, profit, tax paid, staff and assets. The data is shared between tax authorities but not yet public.
- Digital Services Tax (DST)
A tax on the revenue (not profit) of large digital platforms from users in one country. The UK's 2% DST is paid by just 18 firms and raised £808m in 2024-25.
- Diverted Profits Tax (DPT)
A standalone UK tax at 31%, above the main rate, aimed at profit artificially diverted out of the UK. It does not apply to small businesses.
- Double Irish
A now-closed structure that used a mismatch between Irish and US residency rules to create a company tax-resident nowhere. Closed to new entrants in 2015.
- Effective tax rate vs headline rate
The headline rate is what the law says; the effective rate is what a company actually pays on its real profit. For big firms the two can be miles apart.
- Equalisation levy (India)
India's tax on digital revenue earned by foreign firms: 6% on online ads (2016) and 2% on e-commerce (2020). Both now repealed, on different dates.
- FDII / FDDEI (US export incentive)
A US break that taxes income from foreign sales of US-held IP at below the headline rate, to keep IP onshore. Renamed FDDEI under OBBBA; effective rate now about 14%.
- GAAR (General Anti-Avoidance Rule)
A statutory catch-all that lets a tax authority strike down arrangements which obey the letter of the law but abuse its purpose. The UK, Canada, Australia, India and South Africa all have one.
- GILTI / NCTI (US minimum tax on foreign income)
A US tax on the foreign income of US multinationals above a routine return. Renamed NCTI under the 2025 OBBBA; effective rate now about 12.6%.
- GloBE (Global Anti-Base Erosion rules)
The rule set that delivers Pillar Two's 15% minimum tax: the Income Inclusion Rule plus the Undertaxed Profits Rule backstop.
- Hybrid mismatch
When two countries classify the same instrument or company differently, producing a tax deduction in one with no matching taxable income in the other.
- MAAL (Multinational Anti-Avoidance Law, Australia)
An Australian law from 2016 stopping foreign multinationals (global income over A$1bn) from arranging their affairs to avoid an Australian taxable presence.
- Marginal relief (UK)
The UK taper between the 19% small-profits rate and the 25% main rate. Profits from £50,000 to £250,000 face a 26.5% effective marginal rate.
- Patent box
A reduced corporate tax rate (10% in the UK) on profit from patented inventions. A genuine relief for small firms with real patents; widely used by multinationals to park IP.
- Pillar One
The OECD plan to give market countries taxing rights over the biggest, most profitable multinationals (revenue over €20bn). Still not implemented.
- Pillar Two (global minimum tax)
The OECD global minimum tax: groups over €750m face a 15% minimum effective rate per country, via top-up taxes. Live from 2024; projected to raise US$155-192bn a year.
- Profit shifting
Moving taxable profit out of the country where the work actually happens and into a lower-tax or no-tax country. Costs governments about US$348bn a year.
- QDMTT (Qualified Domestic Minimum Top-up Tax)
A domestic top-up tax that lets the country where low-taxed profit arises collect the Pillar Two top-up itself, rather than ceding it to the parent's country.
- Tax avoidance vs evasion vs planning
Planning is using reliefs as intended (legal). Avoidance is exploiting loopholes against the law's purpose (legal but contested). Evasion is concealment (illegal).
- Tax haven
A jurisdiction with low or zero corporate tax that attracts multinational profit with little need for any real activity. At the top of the index: BVI, Cayman and Bermuda, with Switzerland the highest non-British-territory.
- The tax gap
The difference between tax that should be paid and tax actually collected. The UK gap is £46.8bn; small businesses are 60% of it, mostly through error.
- Thin capitalisation
Funding a subsidiary with heavy internal debt so that large, deductible interest payments strip its taxable profit out to a related lender in a lower-tax country.
- Transfer pricing
Transfer pricing is the price one part of a multinational charges another part of the same group. It is the main way profit is moved between countries.
- Treaty shopping
Routing income through a third country purely to use its favourable tax treaty and cut the withholding tax that would otherwise apply.
- Unitary taxation / formulary apportionment
An alternative system: pool a group's worldwide profit, then split it between countries by a formula based on real activity (staff, sales, assets), not where profit is booked.
Reference
- Headline rate, effective rate, cash rate: why the number you read is rarely the number paid
The same company can have three different tax rates at once. Here is what each one measures, why they diverge, and when a low rate is fine.
- Corporate tax avoidance: 16 questions answered
Do big firms pay less tax than small ones? Is it legal? Why do you pay more? Lead-answer-first answers with verified figures, across the UK, US, Canada, Australia, India and South Africa.
- How we know this, and how you can check
Our sourcing standard: every figure pinned to a primary source, every comparison shown both ways, and the working left open for you to check.
About & legal
- About LoopholeKiln
Who runs LoopholeKiln, how it is funded, why it names no one but the public record, and why it collects nothing from you.
- Accessibility
We build LoopholeKiln to be usable by everyone, aiming at the WCAG 2.2 AA standard. What we do, where we may fall short, and how to tell us.
- How to reach us
One email for everything: a correction to a figure, a question, a request, or a complaint. No form, no funnel, no database.
- What this site is, and what it is not
LoopholeKiln is public-interest explanation, not tax or legal advice. How to read our figures, why we name no companies, and how to tell us if we get something wrong.
- Our privacy notice, and why it is so short
LoopholeKiln sets no cookies, runs no analytics, and asks you for nothing. The little data any website unavoidably handles, your rights, and how to reach us.
- Terms of use
The simple terms for using LoopholeKiln: what you can do with our words and our data, what we promise and what we do not, and the law that governs it.
Other
- Tax havens, named: which countries do the work, and what each one is for
Not all havens do the same job. Some are where money stops; some are where it passes through. Which jurisdictions, and what role each one plays.
- Delaware, Singapore and the Mauritius route: an onshore haven, an Asian hub, and a closed door
America's tax haven is inside America. Singapore is Asia's holding hub. Mauritius let investors avoid Indian tax for thirty years, until 2016 shut it.
- The European conduits: Ireland, the Netherlands, Luxembourg and Switzerland
Four respectable European economies, four roles in the tax system. What each offers a multinational, and what the EU has done about it.
- The UK spider's web: how Britain runs the world's largest tax-haven network
The City at the centre, the Crown Dependencies and Overseas Territories around it. Three of the world's top four corporate tax havens are British.
- The sector playbooks: each industry's signature tax move, in one place
Each industry shifts profit its own way. Here is the signature move and the rate it actually pays, from tech and pharma to the retail on your high street.
- Extractives: how a trading hub mis-prices the oil out of a country, and who pays
You cannot move a mine, so extractives mis-price the commodity through a low-tax trading hub. Up to about a third of profit shifts; the poorest nations pay for it.
- Finance and banking: the sector that avoids tax and builds the structures for everyone else
Banks shift profit with internal loans and hybrids, and build the structures every other sector uses. About 14% of their profits sit in tax havens.
- Pharma and life sciences: how a single patent offshore drives the US tax bill negative
Pharma's lever is the patent: worth billions, holdable anywhere. The seven biggest US drugmakers had a combined US tax bill of negative $250m in 2023.
- Retail and consumer brands: the brand-royalty move your high street actually feels
A chain licenses its own brand offshore and charges each shop a royalty, so a profitable business reports losses. The move your high street actually feels.
- Tech and digital platforms: how mobile software and a low-tax hub cut the rate to 18.8%
Tech's move: own the code and brand offshore, then book platform sales through a low-tax hub. The six largest US tech firms paid 18.8% over a decade. The arithmetic.
- The bigger picture: what corporate tax avoidance actually costs, and where it came from
Beyond the numbers: what the lost revenue could fund, how the system was built, the case for the defence, who it hurts most, and whether the crackdowns worked.
- Did the crackdowns work? An honest scorecard, and the people who paid for them
What enforcement actually recovered after the leaks, what the whistleblowers risked, and where the response succeeded or failed. The honest version, both ways.
- How we got here: a century of international tax, in one timeline
From the 1920s League of Nations economists to the global minimum tax: how the rules that let profit move came to be written, and by whom.
- The counter-case: what the other side argues, stated fairly then weighed
Companies and free-market economists have real arguments for the status quo. Here are the strongest versions, on the record, each weighed against the evidence.
- What the lost revenue could fund: the loss in nurses, country by country
Each country's estimated annual corporate tax loss, translated into registered-nurse salaries at its own official pay rate. Illustrative only, both numbers sourced.
- Who suffers most: the developing-world dimension
Lower-income countries lose a far larger share of their budgets to profit-shifting than rich ones. The mechanism, the development-finance case, and India as the worked example.
- The SME tax trap: how the system squeezes the small operator
While multinationals book profits in havens, small businesses pay full freight - and the rules built to catch avoidance keep landing on the people at the bottom.
- IR35 and off-payroll working: taxed as an employee, with none of the rights
Two decades of status fights ended in blanket determinations that leave contractors taxed as employees while receiving none of the protections of employment.
- R&D tax relief: the fraud wave, and the crackdown now hitting the innocent
A relief built to help small firms innovate was overrun by fraud and rogue advisers - then a crackdown cut legitimate SME claims roughly in half.
- The Loan Charge: a tax that reached back twenty years
The Loan Charge taxed up to two decades of income as if earned in a single day. The scale, the human toll, and the accountability gap, reported straight.
- Umbrella and mini-umbrella fraud: skimming the bottom of the chain
Around 700,000 people work through umbrella companies. The legal model serves a purpose - the fraud built on top of it ran for years with no statutory regulation.
- The system: the taxes you feel, the referees who are outgunned, and the people who write the rules
The lean core shows the rate gap. This is the machine behind it: the VAT you pay, the tax authorities being cut, the official gaps, and who sets the rules.
- The asymmetry of arms: why avoidance wins before anyone gets clever
Tax authorities on civil-service pay, cut year after year, against a 1.5-million-strong advisory industry. The HMRC decline, the IRS funding war, and why the contest is one-sided by design.
- The tax gap, decomposed: how much is fraud, how much is honest error, and who it really sits with
Every country measures what it fails to collect. Taken apart by country, the tax gap is mostly error and small-business non-compliance, not the famous corporate structures.
- VAT and GST fraud: the tax small firms feel most, and how it gets stolen at scale
Carousel fraud, fake invoices and the e-commerce VAT gap that let overseas sellers undercut domestic firms by 20% for two decades. The mechanism, the scale, the reforms.
- Who makes the rules: the OECD, the EU, the IMF, and the UN fight over global tax
International tax law is written by bodies most people have never heard of. Who has a vote, who only has a seat, and why the developing world is trying to move the whole thing to the UN.
- Why this exists
LoopholeKiln is on the side of the small business. We explain how the tax system favours scale, in plain numbers, and name the rules rather than the firms.