## offshore-tax-havens-and-inequality-picture

## Source details

**Canonical URL:** [offshore-tax-havens-and-inequality-picture](https://www.imf.org/-/media/files/publications/fandd/article/2019/september/offshore-tax-havens-and-inequality-picture.pdf)

## Other formats

- [Markdown version](/-/media/files/publications/fandd/article/2019/september/offshore-tax-havens-and-inequality-picture.pdf.md)
- [Structured JSON version](/-/media/files/publications/fandd/article/2019/september/offshore-tax-havens-and-inequality-picture.pdf.json)

---

### Estimates and data sources
- Total offshore wealth estimated at about 10 percent of world GDP in 2007, or $5.6 trillion.
- About half was kept in Switzerland.
- Primary data sources used:
  - Country-by-country breakdowns of offshore wealth published by the central bank of Switzerland.
  - Bank for International Settlements data (from 2016 onward) on the origin of bank deposits held in offshore banking centers such as Jersey and Luxembourg.
- Method: Zucman and collaborators used the two data sources to estimate the ratio of offshore wealth to GDP by country.

### Global variation and country-level figures
- The fraction of wealth held in tax havens varies considerably by country.
- Values cited:
  - World average: 9.8%.
  - Offshore wealth ranges from just a small percentage of GDP in Scandinavia to as much as 60 percent in Russia, the Gulf states, and Latin America.
- Example country listing (offshore wealth, percent of GDP, 2007) includes:
  - Korea, Poland, China, Denmark, Finland, Japan, India, Norway, Indonesia, Canada, Iran, Sweden, Netherlands, Brazil, Australia, Mexico, United States, Austria, Thailand, Colombia, Ireland, Spain, South Africa, Italy, Russia, France, Germany, United Kingdom, Belgium, Turkey, Portugal, Taiwan, Province of China, Greece, Argentina, Russia (NEO), Saudi Arabia, Venezuela, United Arab Emirates.
- Note: Russia (NEO) denotes an alternative estimate obtained by cumulating net errors and omissions in the balance of payments.
- Note on offshore center classification: American offshore centers = Cayman Islands, Panama, United States; Asian offshore centers = Bahrain, Hong Kong SAR, Macao SAR, Malaysia, Singapore as well as The Bahamas, Bermuda, and Netherland Antilles; other European centers = Austria, Belgium, Cyprus, Guernsey, Jersey, Isle of Man, Luxembourg, United Kingdom.

### Shifts over time and geographic patterns
- Switzerland’s share of offshore bank deposits has been declining since the global financial crisis of 2008–09, while those of Asian offshore centers have been rising.
- Time warp observation:
  - In Scandinavia and Europe, the wealth of the top 0.01 percent has returned to the levels of the 1950s.
  - In the United States, the share of the top 0.01 percent has surpassed levels of the early 20th century.
- Proximity to Switzerland is associated with higher offshore wealth.
- Offshore wealth is also associated with:
  - The presence of natural resources.
  - A history of political instability.
  - Political and economic instability more generally.

### Distributional impacts and inequality
- Leaked data from the Swiss subsidiary of HSBC in 2007 and other sources suggest the distribution of offshore wealth is heavily skewed toward the rich:
  - About 80 percent belongs to the top 0.1 percent of households.
- Accounting for offshore assets substantially boosts the wealth share of the very richest people.
- Resulting conclusion stated in the source: inequality may be far greater than other studies have found.
- Specific metric cited:
  - The share of wealth owned by the top 0.01 percent of society grows substantially when offshore assets are counted (top 0.01 percent wealth share and its composition, 2000–09 average, percent of total household wealth).

*Prepared by F&D’s LIJUN LI and CHRIS WELLISZ, based on “Who Owns the Wealth in Tax Havens? Macro Evidence and Implications for Global Inequality,” by Annette Altstadsaeter, Niels Johannesen, and Gabriel Zucman, published in September 2017 by the National Bureau of Economic Research.*

---


_Source: https://www.imf.org/-/media/files/publications/fandd/article/2019/september/offshore-tax-havens-and-inequality-picture.pdf_