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From Monaco to Ireland, low-tax regimes continue to attract wealth and multinational profits despite years of European and OECD reforms
Ten years after the release of the Panama Papers, the debate surrounding tax havens and aggressive tax planning remains as relevant as ever. In 2016, an international consortium of investigative journalists exposed more than 11 million confidential documents linked to the Panamanian law firm Mossack Fonseca, revealing how politicians, billionaires, corporations and celebrities used offshore structures to minimize — and sometimes evade — taxes. The scandal shocked public opinion worldwide and highlighted a growing imbalance: while ordinary citizens and businesses faced austerity measures and rising taxation, vast amounts of wealth were being shielded from national tax systems.
A decade later, despite international reforms and stricter transparency rules, the problem has by no means disappeared. According to a recent study by the CGIA of Mestre, Italy alone lost approximately €10 billion in tax revenue during 2024 because of profit shifting and favourable foreign tax jurisdictions. And contrary to popular belief, modern tax havens are not limited to tropical islands or distant offshore territories. Several of the most advantageous fiscal regimes are located directly within Europe itself.
It is important, however, to distinguish between legitimate low-tax jurisdictions and classic tax havens. The Organisation for Economic Co-operation and Development generally defines a tax haven as a jurisdiction characterized by extremely low or zero taxation, limited transparency, weak economic substance requirements and restricted information sharing with foreign tax authorities. Few European states now meet all these criteria simultaneously, largely because of growing international pressure. Yet many countries continue to offer highly attractive systems for wealthy individuals and multinational corporations.
Perhaps the most famous example is the Monaco. The tiny Mediterranean principality does not impose personal income tax on its residents, effectively eliminating the equivalent of Italy’s IRPEF. Unsurprisingly, Monaco has become home to numerous celebrities and athletes, including Jannik Sinner, Flavio Briatore and Lewis Hamilton. Residents also benefit from the absence of capital gains taxes on many financial investments. Importantly, these arrangements are generally legal and based on residency rules rather than outright tax evasion.
If Monaco represents a haven for wealthy individuals, Luxembourg has historically become a preferred destination for multinational corporations and investment holdings. As one of the founding members of the European Union, Luxembourg developed an advanced financial and corporate infrastructure that transformed it into one of Europe’s largest financial hubs. Through structures such as SOPARFI holding companies, corporations can manage international participations under highly favourable tax conditions. Dividends and capital gains from foreign subsidiaries often benefit from generous exemptions, allowing companies to concentrate profits in the Grand Duchy with reduced taxation. Major Italian industrial groups, including Ferrero and EssilorLuxottica, have frequently been associated with Luxembourg-based structures.
Other European jurisdictions continue to maintain similarly advantageous systems. Liechtenstein and Andorra were once primarily known for strict banking secrecy and minimal taxation. Although transparency rules have tightened considerably in recent years, both countries still offer competitive tax environments. Liechtenstein has increasingly focused on international finance and cryptocurrency regulation, while Andorra remains attractive for entrepreneurs and wealthy residents seeking lighter taxation than in neighbouring EU countries.
Outside the European Union, the British Crown Dependencies — particularly Jersey, Guernsey and the Isle of Man — continue to play a major role in global tax planning. These territories maintain broad fiscal autonomy and, in many cases, apply a 0 percent corporate tax rate for numerous businesses. The Isle of Man has become especially prominent in online betting and eGaming thanks to its flexible regulation and favourable fiscal treatment.
Yet the most controversial examples are often found within the European Union itself. Countries such as Ireland and Netherlands are frequently accused of engaging in “tax dumping” — aggressive fiscal competition designed to attract multinational profits.
Ireland built much of its economic success on a corporate tax rate of 12.5 percent and a series of favourable arrangements for multinational technology companies. Global giants such as Apple, Google and Meta established major European operations in Dublin. The Apple case became emblematic after the European Commission argued that special tax agreements had allowed the company to pay almost no taxes on certain European profits. In 2024, the European Court of Justice confirmed Brussels’ demand for €13 billion in unpaid taxes.
The Netherlands followed a different path. Rather than relying on exceptionally low tax rates, the Dutch system became famous for its extensive network of tax treaties and flexible holding structures that allowed royalties, dividends and profits to pass through the country with minimal taxation. A notable example is Exor, which moved its headquarters to Amsterdam in 2016 while maintaining strong industrial ties to Italy.
Meanwhile, Hungary, Malta and Cyprus represent another model of fiscal competition. Hungary applies the lowest corporate tax rate in the EU at just 9 percent, while Malta’s refund mechanisms can reduce effective corporate taxation to around 5 percent. Cyprus continues to attract international capital through favourable treatment of holdings and intellectual property.
In response to mounting criticism, the OECD and G20 introduced the Global Minimum Tax, which entered into force in 2024. The reform establishes a minimum 15 percent tax rate for multinational groups with revenues exceeding €750 million. If companies pay less than that in low-tax jurisdictions, their home countries may impose an additional levy to bridge the gap.
The objective is clear: reduce the incentive for multinational corporations to artificially shift profits abroad. Whether the reform will significantly curb tax competition inside Europe remains uncertain. What is certain, however, is that the struggle between national public finances and global tax optimization is far from over.
Alessandro Fiorentino