GLOBAL OFFSHORIZATION AS THE COST OF THE STRUGGLE FOR INTERNATIONAL COMPETITIVENESS OF THE FINANCIAL MARKET

Abstract

The article considers the formation peculiarities of international financial centers. The focus is on the role what offshore jurisdictions play in the global financial system and the necessity for offshore activities regulation. The above regulation acts should be based on and use international experience and supranational level of cooperation and control. The economic process of capital outflow and its direct impact, volumes and consequences for international financial markets are considered. It is determined that the struggle for the competitiveness of the domestic financial market is one of the key motives that creates the scale and attractiveness of offshore centers, because of further manipulation and use of various schemes to minimize taxation and withdrawal of capital outside its origin. Statistical data indicates that such a significant concentration of funds in offshore jurisdictions accounts is a consequence of systematic tax evasion which leads to stable process of increasing international financial instability. It should be noted that the most tangible direct consequences of capital withdrawal, in addition to the lack of tax revenues by the budget are unfair tax competition; accumulation in offshore areas large amounts of speculative capital; growth of opportunities for shadowing of the economy and all the conditions for the direct outflow of capital from the country of origin. It is determined that nowadays the fundamental document in the field of. regulation international capital movements is Plan BEPS (Base erosion and profit shifting). This document defines the main stages and measures for countries to counter and control of the appearance new schemes which is aimed to aggressive tax optimization, profit shifting to offshores and generally globalization of the process of offshorization of financial markets and the economies of countries. Conclusions and suggestions are made that international cooperation and practical implementation of global recommendations (BEPS plan) can reduce the attractiveness of offshore financial centers and the further outflow of capital towards low-tax havens.