lead European Bank A new report shows that these companies book about 20 billion euros (£17 billion) in tax havens each year-equivalent to 14% of their total profits, with Barclays, HSBC and NatWest Group having the lowest tax rates.
These data come from an analysis of 36 major banks conducted by the EU Tax Observatory, which requires 36 major banks to publicly report country-specific data on their activities.
Allegedly, the effective tax rate on its profits is particularly low, less than 15%, including Barclays Bank, HSBC and NatWest-the latter is renamed Royal Bank of Scotland last year. The effective tax rate is calculated as the ratio between the total tax paid and the declared profit in all jurisdictions.
spokesman HSBC Bank Said that the bank “has not adopted tax avoidance strategies, including those aimed at artificially shifting profits to low-tax jurisdictions.”
spokesman Barclays Indicates that the bank is the fifth largest taxpayer in the UK and pays taxes in the jurisdiction where it operates.
NatWest did not respond to a request for comment.
However, these propositions will further encourage those who believe that leading countries must more ambitiously combat the aggressive tax avoidance and profit shifting of multinational corporations to low-tax jurisdictions.
Many activists believe that the use of tax havens by banks is particularly shocking because more than 150 million euros in taxpayer funds have been used to bail out banks in trouble. Europe After the 2008 financial crisis.
Following the talks organized by the Paris-based Organization for Economic Cooperation and Development (OECD), 130 countries accounting for more than 90% of global GDP, after initial attempts, supported a global minimum tax rate of 15% for multinational companies in July last year. The President of the United States Joe Biden (Joe Biden) reached to achieve a 21% tax rate.
Biden has proposed parallel measures to restrict the transfer of profits of the world’s 100 largest companies to tax havens, which are currently under discussion in the OECD.
The proposed treaty will give governments of countries where multinational companies are headquartered the right to impose recharge taxes to ensure that all revenues are paid in full at the lowest global tax rate.
However, the report shows a list of 100 companies May exclude banks After lobbying by the City of London and other international financial centers.
The European Union Tax Observatory, an independent research organization, emphasized the benefits of taxing the profits of multinational companies at the lowest global tax rate of 25%-the lowest tax rate currently available among the seven largest economies in the world.
The organization’s report shows that, at such a tax rate, the sample of European banks selected in the report must pay an additional tax of 10 billion to 13 billion euros per year. The lower tax rate reduces revenue to 6 to 9 billion euros (calculated at a 21% tax rate) and 3 billion to 5 billion euros (calculated at a 15% tax rate).
The report reflecting its size recommends HSBC, Barclays, French multinationals BNP Paribas and Societe Generale, and Standard Chartered Bank, Has the largest taxable deficit-the difference between the tax paid today and the tax payable.
The EU Tax Observatory’s research further shows that if any global minimum tax rate is imposed on European banks, the UK finances will be the biggest beneficiaries, partly because of the size of the banks headquartered in the country.
If the tax rate is 15%, the UK will charge an additional 940 million euros and 1.47 billion euros each year in 2020 and 2019.
The author of the report wrote: “We found that most of the tax revenues with the lowest taxes will come from British banks.” Did European banks leave tax havens? Evidence from country/region data.
In recent years, due to the profit transfer of large multinational companies, taxation systems around the world have become increasingly backward.The Tax Justice Network Movement said that multinational corporations abused taxes and the wealthy to avoid taxation cost the country Lost $427 billion in revenue each year.
According to the EU Tax Observatory’s report, the bank’s recorded profits in tax havens are unusually high. Banks in safe havens reported a profit per employee of approximately 238,000 euros, compared to 65,000 euros in non-safe haven countries.
Although the bank credits 14% of its profits to tax havens, the percentage of employees employed is only 4%.
To the disappointment of policymakers and activists, despite the hope that the country-by-country report launched in 2014 will lead to a change in practice, the percentage of profits registered in tax havens has not changed in the past seven years.
During this period, eight banks even increased the percentage of profits registered in tax havens: Monte dei Paschi di Siena (up 19.4%), United São Paulo Bank (up 12.2%), HSBC (up 7.9%), Barclays Bank ( (Up 4.3%)%), Nordea (up 2.1%), BBVA (up 1%), Banco Santander (up 0.8%) and Rabobank (up 0.7%). In the cases of NatWest and Intesa Sanpaolo, losses in the non-hedging market are said to have driven this change.
However, the behavior of the banks studied varies. The average percentage of profits recorded in tax havens is about 20%, but this number ranges from 0% for 9 banks to 58% for HSBC.
This number is very high because HSBC and Hongkong, For the purposes of this study, it is regarded as a tax haven.
As one of the largest banks in the world, HSBC’s turnover, profits and employees account for 10% of the 36 banks studied. The report claims that its profits attract the lowest average effective tax rate (13%).
HSBC records nearly 60% of its total profits in Hong Kong, with an effective tax rate of 11%. Although the percentage of Hong Kong employees (15% of the total) is significantly lower than the recorded profit.
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In contrast, China accounts for an average of 13% of HSBC’s total employees, but only 6% of total profits, while India accounts for 19% of total employees and 5% of total profits.
The author of the report wrote: “One possible explanation is that Hong Kong has a preferential tax system and is often used for investment in Asia, especially investment centers from China.”
A spokesperson for the bank said: “In view of the history, business scale and strategy of HSBC, a large part of the group’s profits continue to come from Hong Kong. We are the largest bank in Hong Kong with [circa] 30,000 employees. “
For research purposes, the study named 17 countries and regions as safe havens: Bahamas, Bermuda, British Virgin Islands, Cayman Islands, Guernsey, Gibraltar, Hong Kong, Ireland, Isle of Man, Jersey, Kuwait, Luxembourg, Macau, Malta, Mauritius, Panama and Qatar.
Among these territories, Luxembourg has the highest tax rate (15%), while Bermuda, Panama, the British Virgin Islands and the Cayman Islands have zero tax rates.
