How we got here: a century of international tax, in one timeline

The system that lets a company book its profit a thousand miles from where it earned it was not an accident, and it was not invented by the companies. It was designed by governments, starting in the 1920s, for reasons that had nothing to do with fairness. This is the timeline of how a set of rules built to stop double taxation became the machinery for double non-taxation, and how, a century later, the world began trying to undo it.

The single most useful thing to understand about corporate tax avoidance is that the rules came first and the avoidance came second. The international tax framework was drawn up before multinationals as we know them existed, by a small group of economists working for the League of Nations, to solve a different problem entirely. Everything since has been built on those foundations, including the gaps.

1920 to 1928: the foundations, drawn by the winners

The modern framework began with a practical worry, not a moral one: in the 1920s, businesses trading across borders risked being taxed twice on the same profit, once at home and once abroad. The newly formed International Chamber of Commerce pressed for a fix, and the League of Nations' Financial Committee took up a study of double taxation from 1921.

In 1923, four prominent economists, Bruins, Einaudi, Seligman and Sir Josiah Stamp, published a Report on Double Taxation that introduced the idea of "economic allegiance" as the basis for deciding which country gets to tax what. That report became the intellectual foundation of the entire bilateral tax-treaty network that still governs cross-border tax today. In 1928, the League published the first model bilateral tax treaties, in source-based and residence-based variants, setting the template that would later be exploited for offshore structuring.

The detail that matters most: these rules were drafted principally by representatives of capital-exporting nations, with little input from colonial territories or what would become the developing world. The map of who gets to tax cross-border profit was drawn by the countries that owned the capital, and it has favoured them ever since. That is not an editorial flourish; it is the documented origin, and it explains a great deal about who loses today.

1940s to 1960s: institutionalised, and the havens emerge

After the Second World War, the OECD's predecessor body continued the League's work, and the OECD Fiscal Committee was formally established in 1956. The treaty network expanded quickly through the 1950s and 1960s. In parallel, a set of jurisdictions began building low-tax or zero-tax regimes aimed specifically at non-resident companies, exploiting the residence-and-source gaps in the 1928 model: Switzerland (already entrenched), the Cayman Islands, the British Virgin Islands, Luxembourg, Ireland, and later the Netherlands. The offshore system did not appear overnight; it grew into the spaces the original rules left open.

1980s to 1990s: the offshore boom

Three things combined to turn structuring from a niche practice into standard corporate finance: the liberalisation of capital flows, the rise of the modern multinational, and the explosion of intellectual property as the main thing of value in a company. Intangibles can be owned anywhere, so profit attributed to them can be booked anywhere, which is the engine of most modern profit-shifting.

Statutory corporate tax rates were falling across this era and kept falling. The OECD's combined average statutory rate dropped from 30.8% in 2000 to 23.1% in 2020, a decline whose roots lie in the Reagan and Thatcher deregulation period of the 1980s. Transfer pricing, thin capitalisation and hybrid mismatches became routine planning tools. The United States' "check-the-box" rules in 1997 turbo-charged hybrid structures by letting a subsidiary be treated as one kind of entity for US tax and another for the host country's, a mismatch that profit could fall straight through.

2010 to 2014: the leaks, and public anger

The politics changed after the 2008 financial crisis, when austerity made corporate tax bills a public grievance. In November 2012, the UK Parliament's Public Accounts Committee summoned executives from three multinationals, a search-and-advertising group, an online-retail group and a coffeehouse chain, to a televised hearing. The committee's reaction was scathing, framing the companies' arrangements as an affront to the ordinary businesses and individuals who pay their share. Facing a consumer boycott, the coffeehouse chain made a voluntary payment of £20 million to HMRC in 2013, the first time a major multinational explicitly accepted that a legal tax arrangement could still carry a reputational cost. (That chain had paid around £8.6 million in UK corporation tax across some 14 years of trading; the exact figures have variant reportings, so we footnote rather than over-pin them.)

In November 2014, the International Consortium of Investigative Journalists published LuxLeaks: more than 28,000 pages of leaked tax rulings showing how hundreds of multinationals, including online-retail, food-and-drink, furniture-retail and entertainment groups, had secured private deals with Luxembourg cutting their effective tax rates to near zero. The documents were leaked by two former employees of one of the large accountancy firms. What happened to them afterwards is its own story, told on did the crackdowns work.

2015: BEPS, the first coordinated response

In July 2013, at the G20's request, the OECD published an Action Plan on Base Erosion and Profit Shifting (BEPS), naming 15 "Actions" covering transfer pricing, hybrid mismatches, interest deductibility, treaty abuse and country-by-country reporting, among others. In October 2015 the OECD delivered the final reports on all 15 Actions; the package was endorsed by G20 leaders at the Antalya summit in November 2015. (A common error places this at the Brisbane summit, which was November 2014 and endorsed the earlier timeline, not the 2015 final package.) The OECD estimated the annual global cost of the problem BEPS was tackling at US$100 to 240 billion, or 4 to 10% of corporate income tax revenue. The BEPS Inclusive Framework later grew to over 145 jurisdictions.

2016: the Panama Papers

On 3 April 2016, the ICIJ and more than 100 media partners published the Panama Papers: 11.5 million leaked documents from a Panamanian offshore law firm, exposing 214,488 offshore entities used by world leaders, oligarchs and corporations. The anonymous source, who used only a pseudonym, had passed the documents to a German newspaper. That law firm closed in 2018. The recoveries that followed are scored on the enforcement page.

2015, surfacing in this window: SwissLeaks

Published in February 2015 but built on data extracted by a whistleblower in 2008, SwissLeaks exposed more than 130,000 suspected tax evaders holding accounts at the Swiss private bank of a major international banking group, across more than 200 countries. The whistleblower, a French-Italian systems engineer at the bank, was arrested in Switzerland in 2008 and went on to cooperate with European tax authorities; Switzerland convicted him in absentia, and Spain repeatedly refused to extradite him.

2021: Pillar Two, a floor under the race

In December 2021, the OECD/G20 Inclusive Framework released the GloBE (Global Anti-Base Erosion) Model Rules: the technical framework for a 15% global minimum corporate tax on multinational groups with revenues of €750 million or more. This was the centrepiece of the "BEPS 2.0" two-pillar deal, agreed politically by 136 countries in October 2021. The OECD projected it would raise global corporate income tax revenues by US$155 to 192 billion a year. Implementation began in 2024 in early-adopter jurisdictions including the EU, the UK, Switzerland, Japan, Canada, Australia and South Korea.

2023 to 2026: the UN steps in, and the uncertainty

The State of Tax Justice 2024 found little evidence that profit-shifting volumes had fallen across the six years of OECD BEPS data, which is the central tension of where we are now: a decade of reform, and a problem that has not visibly shrunk. In August 2024, UN member states voted overwhelmingly to adopt terms of reference for a UN Framework Convention on International Tax Cooperation, with formal negotiations scheduled for 2025 to 2027. Eight countries voted against: the United States, the United Kingdom, Australia, Canada, Israel, Japan, New Zealand and South Korea, a group responsible for a large share of global tax losses while hosting a small share of the world's population. As of June 2026, the Pillar Two minimum is live in over 50 jurisdictions, though the United States has not implemented it.

The shape of the century

Read end to end, the timeline tells one story. The rules were built by capital-exporting governments in the 1920s to stop double taxation, and the gaps they left were colonised first by havens, then by the intangible-heavy multinationals of the 1980s and 1990s. The leaks of the 2010s made the cost visible, the OECD's BEPS project and Pillar Two are the first serious attempts to close the gaps, and the UN process is a sign that many countries think the OECD's response did not go far enough. At no point in this story did a company break the rules to create the system. Governments built it, and governments are now, slowly and incompletely, trying to rebuild it.

Key facts

• The 1923 League of Nations Report on Double Taxation (Bruins, Einaudi, Seligman, Stamp) introduced "economic allegiance" and founded the bilateral tax-treaty network; the 1928 model treaties set the template.
• The rules were drafted principally by capital-exporting nations, with little input from colonial or developing territories.
• OECD average statutory corporate rate fell from 30.8% (2000) to 23.1% (2020), with roots in 1980s deregulation; US "check-the-box" rules (1997) enabled hybrid structures.
• The OECD's final BEPS package (15 Actions, October 2015) was endorsed at the Antalya G20 summit in November 2015, not Brisbane.
• LuxLeaks (2014), Panama Papers (2016) and SwissLeaks (2015, on 2008 data) made the cost public; Pillar Two's 15% minimum (€750m threshold) began in 2024 and is live in over 50 jurisdictions by June 2026, though not in the US.