New IMF investment database shed lights on tax avoidance

18 February 2011

The IMF released its Coordinated Direct Investment Survey (CDIS) – the first comprehensive database on global foreign direct investment – in December. In addition to revealing the scale and direction of global investment flows, the database has raised questions about certain countries’ roles as tax havens. Luxembourg, for example, attracted an equal $1.8 trillion in both inward and outward investment according to the CDIS. UK-based NGO Tax Justice Network said of the IMF survey: “It doesn’t take an advanced degree in economics to come to the conclusion that while the IMF cross-border investment data might be accurate, it highlights a fascinating but unexplained story about the role of secrecy jurisdictions in global investment flows. Does Luxembourg add value to the process, or is it merely used as a conduit for tax cheating?”