Transparency watchdog, The Tax Justice Network, released their Financial Secrecy Index yesterday, in which they described claims that Ireland’s corporate tax rate as being close to the 12.5% headline rate as ‘fictional’, writes Patrick Brusnahan.

The report describes Ireland as a ‘prolific source of tax loopholes’ and ‘particularly adept at helping transnationals artificially relocate their profits.’ The financial sector was purported to be a ‘financially captured state, where politically networked private insiders effectively write the laws with little or no democratic consultation.’

Furthermore, the report examines the claim that the effective and headline tax rates are similar and found it to be based on a ‘theoretical "standard firm with 60 employees" and no exports.’ On the issue the headline tax rate relating to transnationals, it found the claims to be ‘entirely inapplicable.’

Ireland placed 47th in the financial secrecy index, with Switzerland topping the table for the second year in a row. Luxembourg, Hong Kong, the Cayman Islands and Singapore completed the top ten. The United Kingdom placed 21st, but, interestingly, if it was combined with ‘satellite secrecy jurisdictions’ that it partly controls, then it would have overtaken Switzerland at the top.

Another ‘worrisome’ tax regime was the one in place in Germany which allows the laundering of around 57 billion euros every year by organised crime networks from around the world. There were no statistics on the money laundering, but the report said: "It is still home for large volume of tax evading and other illicit flows and assets from around the world."