The United Nations Conference on Trade and Development’s (UNCTAD) new report, “Global Value Chains: Investment and Trade for Development,” advises that global efforts to tackle tax evasion must focus on both offshore financial centers (OFCs) and special purpose entities (SPEs).

According to the report, the number of countries offering favorable tax conditions for SPEs is increasing, and the so-called “tax haven” economies account for 6 percent of global foreign direct investment (FDI) flows.  Specifically, the report states that while investment in OFCs remains at record levels and international efforts to combat tax evasion have mostly concentrated on OFCs, SPEs channel more than USD600bn of investment flows.  The UNCTAD report urges governments to crack down on tax avoidance through both OFCs and SPEs.