All guides

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.

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.

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.

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.

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.

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.

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.

How much profit multinationals move to low-tax countries, what it costs governments, and which verified figures actually stand behind the headlines.

Multinationals price their internal trades, and that price decides which country gets the profit. How it works, legally, and the limits of policing it.

A sourced country-by-country table of corporate tax rates and the billions lost to avoidance across the UK, US, Canada, Australia, India and South Africa.

The headline figures on global corporate tax avoidance, each pinned to its original OECD, academic or Tax Justice Network source and year.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

How the big named tax structures actually work, step by step. Most were legal. Several are now closed. Here is which, and when.

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.

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 most famous tax structure ever built. How the Double Irish moved profit to Bermuda untaxed, who used it, and exactly when it closed.

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.

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.

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.

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.

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 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.

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.

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.

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.

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.

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.

Plain-English definitions of the tax terms behind why big multinationals pay near-zero while small firms pay full freight. Verified figures.

The rule that deals between companies in the same group must be priced as if the two sides were independent, unconnected businesses.

Shrinking a country's taxable profit base by making deductible payments (interest, royalties, fees) to a related company in a lower-tax country.

A US minimum tax on large corporations that make big deductible payments to foreign affiliates. Set permanently at 10.5% under the 2025 OBBBA.

The OECD/G20 reform project, and the umbrella term, for how multinationals exploit gaps between countries' tax rules. 15 actions delivered by 2015.

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.

A pass-through country used to cut withholding tax on money moving toward a haven. The Netherlands, Luxembourg and Ireland are the classic conduits.

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.

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.

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.

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.

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.

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.

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%.

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.

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%.

The rule set that delivers Pillar Two's 15% minimum tax: the Income Inclusion Rule plus the Undertaxed Profits Rule backstop.

When two countries classify the same instrument or company differently, producing a tax deduction in one with no matching taxable income in the other.

An Australian law from 2016 stopping foreign multinationals (global income over A$1bn) from arranging their affairs to avoid an Australian taxable presence.

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.

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.

The OECD plan to give market countries taxing rights over the biggest, most profitable multinationals (revenue over €20bn). Still not implemented.

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.

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.

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.

Planning is using reliefs as intended (legal). Avoidance is exploiting loopholes against the law's purpose (legal but contested). Evasion is concealment (illegal).

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 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.

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 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.

Routing income through a third country purely to use its favourable tax treaty and cut the withholding tax that would otherwise apply.

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.

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.

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.

Our sourcing standard: every figure pinned to a primary source, every comparison shown both ways, and the working left open for you to check.

Who runs LoopholeKiln, how it is funded, why it names no one but the public record, and why it collects nothing from you.

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.

One email for everything: a correction to a figure, a question, a request, or a complaint. No form, no funnel, no database.

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.

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.

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.

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.

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.

Four respectable European economies, four roles in the tax system. What each offers a multinational, and what the EU has done about it.

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.

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.

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.

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'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.

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'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.

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.

What enforcement actually recovered after the leaks, what the whistleblowers risked, and where the response succeeded or failed. The honest version, both ways.

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.

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.

Each country's estimated annual corporate tax loss, translated into registered-nurse salaries at its own official pay rate. Illustrative only, both numbers sourced.

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.

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.

Two decades of status fights ended in blanket determinations that leave contractors taxed as employees while receiving none of the protections of employment.

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 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.

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 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.

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.

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.

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.

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.

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.