submitted by Taxing Stuff!
Examples of tax treaty reality: Every year Canadian “investors” send $40-70 billion to Barbados, the equivalent of over $140,000 for every man, woman and child, ostensibly as Foreign Direct Investment (FDI), but most of it doesn’t stay in Barbados to build companies or jobs. Despite massive injections of “investment” into Barbados from Canada that is equivalent to six or more times the GDP of Barbados, the per capita GDP in Barbados is half that of Canada or the US.
There is no “brotherhood” here where two countries agree to invest the same amount in each other: In contrast to Canadian-US FDI exchange of approximately one dollar matched by each country, for every dollar of Canadian FDI to Barbados, Barbados sends a penny of FDI back. Under the terms and transparency of the Canada-Barbados Tax Treaty, Canada lost $1.5- 2.5 billion in taxes last year. Multiply this by numerous tax treaties with tax havens, and multiply it again by the fact that many of these treaties are decades old.