While related to
tax havens, the FSI is not a list of tax havens per se, and it does not attempt to estimate actual taxes avoided or
profits shifted, unlike the techniques used in compilation of modern
tax haven lists. The FSI is therefore more correctly a list of
financial secrecy jurisdictions. While having many similarities to tax havens, the FSI produces some results that are very different from established tax haven lists. The FSI showed jurisdictions like the U.S. and Germany, despite high tax rates, are large contributors to global financial secrecy, however, this is often misinterpreted as implying that the US and Germany are "
tax havens"; for example, foreign corporates do not move to the U.S. or Germany to avoid tax. The FSI does not capture modern
corporate tax havens, such as Ireland, the Netherlands and the United Kingdom, who maintain high levels of OECD–compliance and transparency, but are responsible for the global largest
base erosion and profit shifting (BEPS) tax avoidance activity. For example, Apple's Irish "
leprechaun economics" tax restructure in Q1 2015, the largest
BEPS transaction in history, remained unknown for years due to Irish data-protection laws. The issue is the scoring by the FSI for some of the most favored secrecy tools of modern tax havens (or
Conduit OFCs): the
unlimited liability company ("ULC"), trusts, and certain SPV structures (e.g. Irish
QIAIFs), none of which file public accounts in havens like Ireland and the United Kingdom. The FSI focuses on ownership of these tools (e.g. is the owner of a ULC recorded), versus visibility into the tools (e.g. is the ULC paying tax). An example of this disconnect, was the
EU's €13 billion tax fine on Apple's two Irish ULCs in 2016, who while known, were found by the EU to be avoiding large amounts of Irish tax during the 2004–2014 period. ==History==