The United Nations called on governments around the world to step up their efforts to reduce the amount of cash being invested into offshore financial centers in order to combat tax evasion.
The Netherlands and Luxembourg were ranked among the preferred destinations for funds from companies to avoid taxes, along with the U.S., Britain, Switzerland and Ireland, according to a report published on Tuesday by the U.N. Conference on Trade and Development.
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The new research shows that companies funneled US$221 billion in 2015 through low-tax jurisdictions such as the Netherlands and tax havens in the Caribbean.
In order to stem offshore financial flows, which diverts much needed funds away from low and lower middle-income governments, UNCTAD called on the international community to “create greater coherence among tax and investment policies at the global level.”
The UNCTAD report includes several recommendations, including the creation of a new international reporting standard, better transparency between tax administrations and restoring the benefits of bilateral tax agreements.
The study’s recommendations come as the Panama Papers continue to shed light on the widespread issue of tax evasion around the globe.
“Revelations that firms large and small have been using offshore financial centers and jurisdictions to evade or avoid taxes have provided additional impetus to policy reforms in these areas,” the UNCTAD report noted.
About 11.5 million leaked documents of the Panamanian law firm Mossack Fonseca, reveal the large-scale use of offshore entities to conceal assets from tax authorities.
WATCH:Panama Papers Unveils Tax Haven Scandal