The situation is exacerbated as the average tax paid by ultra high net worth individuals remains very low when their incomes are taken into account, while they have access to multiple ways to reduce their tax bills.

The EU Tax Observatory is calling for a global minimum tax on billionaires, equivalent to 2% of their wealth. ‘We provide a first estimation of the revenue potential of this measure, showing that it would raise close to $214bn (£176bn) from 2,756 individuals annually, who have total wealth of $13 trillion,’ the group said. This would be equivalent to around an additional tax charge of $7m per billionaire a year.

It is also calling for a mechanism to tax wealthy people who have been long-term residents in a country and choose to move to a low-tax country. Another measure it criticised was the use of non-dom status which is used widely in Europe and of course the UK to offer preferential taxation of worldwide income. Schemes currently operate in the UK, Greece, France, Ireland, Italy, Luxemourgh, Malta, Portugal, Spain and Switzerland.

‘Global billionaires have effective tax rates equivalent to 0% to 0.5% of their wealth, due to the frequent use of shell companies to avoid income tax,’ the EU Tax Observatory said. ‘To date no serious attempt has been made to address this situation, which risks undermining the social acceptability of existing tax systems.’

One of the proposals was to tax the total wealth of billionaire’s assets based on their country of residency but this does pose problems with valuations of private companies and diverse global ssets. Another concern for a wider wealth tax was that many assets are not liquid so they would be difficult to assess, making the cost of raising the tax revenue prohibitively high.

The Observatory said access to assets would not be an issue for ‘billionaires [as they] routinely obtain loans secured against their wealth, eg, to consume while avoiding the income tax, or to make investments without having to divest from their businesses. They could do the same to pay the minimum tax if they wanted to’.

In the foreword to the report, economist Joseph Stiglitz said: ‘Tax evasion and more broadly tax avoidance is not inevitable; it is the result of policy choices or the failure to make policy choices that act to stop it.’

He also noted that ‘progress on tax cooperation makes it possible to better understand and locate the wealth of billionaires. What we asked of corporations we now must ask of billionaires. It is time to establish a global minimum tax on the very rich. This may seem impossible to attain, but so was undermining bank secrecy and introducing a minimum tax on corporations just a few years ago’.

Global 15% tax rate has too many exemptions

The report was highly critical of the effectiveness of plans to introduce a global minimum tax of 15% on multinationals, which has been ‘dramatically weakened’ since the initial plans were proposed by the OECD.

This measure was expected to increase global corporate tax revenues by close to 10%, but a growing list of loopholes has reduced its expected revenues by a factor of two (and by a factor of three relative to a comprehensive minimum tax of 20%, which was the figure the EU Tax Observatory was calling for. Even if the original OECD plan had been implemented, it could have raised an annual $250bn per year in additional tax revenue.

However, a carve-out for economic substance provides incentives for multinational companies to move production to very low-tax countries with incentives for tax havens to keep providing rates below 15%, is undermining the effectiveness, the report said.

Rapid progress could be made against tax evasion if there was the political will to do so, said the EU Tax Observatory. However, it found that over the last 10 years, tax evasion – including grey-zone evasion at the border of legality – was increasingly happening domestically. By contrast, offshore tax evasion has nearly halved due to a much more aggressive approach by tax authorities to crack down on abuse.

Another major factor is profit shifting to tax havens, estimated to be worth around $1 trillion in 2022. This is the equivalent of 35% of all the profits booked by multinational companies outside of their headquarter country.

‘The corporate tax revenue losses caused by this shifting are significant, the equivalent of nearly 10% of corporate tax revenues collected globally. US multinationals are responsible for about 40% of global profit shifting, and continental European countries appear to be the most affected by this evasion’, the report stated.