Four EU states among world's worst tax havens

Bermuda tops the list of the 15 followed by the Cayman Islands and the Netherlands. Ireland ranks 6, followed by Luxembourg (7) and Cyprus (10). The British Virgin islands, Jersey and the Bahamas are also listed.

The ranking comes ahead of a court case in Luxembourg on Monday where former employees of PricewaterhouseCoopers (PwC), who exposed how firms collude with governments to pay less tax, are appealing against their convictions.

The acquittal of French journalist Edouard Perrin, who first exposed the scandal, is also being challenged by the Luxembourg's public prosecutor.

Meanwhile, EU governments continue to use elaborate schemes to provide firms with preferential tax treatments in an effort to attract their business and investments.

But those that benefit are most often the owners and shareholders at the expense of national budgets.

The Netherlands and Luxembourg use a combination of tax incentives and schemes to shift profits elsewhere. Cyprus and Ireland have similar strategies but also engage in low corporate tax rates.

The OECD, a Paris-based club of industrialized nations, had launched efforts to curb such schemes, but the plans appear to have backfired as governments race to lower corporate tax rates.

One plan, also taken up by the G20, has attempted to allow governments to tax profits where those profits have been made. Known as the Base Erosion and Profit Shifting (BEPS) initiative, the move has instead resulted in states reducing corporate tax rates.

"Since the BEPS agreement several European countries have announced or made plans to cut corporate tax rates including the UK, Hungary, Belgium, and Luxembourg," notes the report.

But such efforts may also be breaking the rules if abused.

Belgium earlier this year was ordered by the EU commission to recover hundreds of millions of euros after it reduced the corporate tax base of some companies using an "excess profit" tax scheme.

Another report last week by the Brussels-based European Network on Debt and Development had found that secret tax deals between EU governments and multinational corporations had increased dramatically following the 2014 media revelations that Luxembourg helped firms avoid paying billions in taxes.

Other EU led efforts to increase transparency and clamp down on the practice may also contain loopholes.

Among the more extreme is an EU attempt to draw up a blacklist of tax havens. Proposed earlier this year by the EU commission, the list won't include any EU member state. Switzerland and the United States probably won't be listed either.

The EU commission had also floated a plan in April that would require multinationals to publish information on taxes paid where they operate.

But the plan only requires the firms to publish the financial data of their operations within the EU and only covers those that earn some €750 million per year.