Tax avoidance by companies in the European Union is costing developing countries billions of dollars in lost tax revenues each year.
The Concordeurope report finds that in developing countries, between $859 billion and $1.138 trillion of illicit financial flows escaped developing countries in 2010 alone. Illicit financial flows includes the proceeds from both illicit activities such as corruption (bribery and embezzlement of national wealth), criminal activity, and the proceeds of licit business that become illicit when transported across borders in contravention of applicable laws and regulatory frameworks (most commonly in order to evade payment of taxes).
Approximately half this money (US$ 429.5 to US$ 569 billion) represents profit-shifting by transnationals, resulting in a loss to developing countries of at least
US$ 100 billion a year in tax revenue. Recent research also shows that just under one in every two dollars of large corporate investment in developing countries is now
being routed from or through a tax haven.
