The organisation Transparency International has once again exposed the questionable tax practices of European banks in a new report published on Tuesday 27 October.
Among the 39 EU and UK banks looked at in the study, 31 were using tax havens between 2015 and 2019, while 29 of them appeared to be declaring high profits in countries where they did not actually employ any staff, the organisation reveals.
“These ‘ghost operations’ may indicate that the banks are shifting their profits to reduce their tax bill”, it concludes.
Several banks mentioned in the study, including HSBC, Barclays and Deutsche Bank, were involved in the recent FinCEN Files scandal (see EUROPE 12564/11). The report shows that at over the last five years, HSBC has reported €1.59 billion of profits in Saudi Arabia, despite not having a single employee in the country. Similarly, Deutsche Bank made €418 million from its Maltese operation, which has been unstaffed since 2016.
The study also reveals that European banks have continued to take advantage of tax havens. At least 32 of the banks surveyed have significant operations in low-tax EU Member States such as Ireland, Luxembourg and Malta. And at least 10 of them also report profits that reveal “shocking differences” between their headquarter countries and the rest of their operations. The report shows, for example, that the profits of Spanish banks abroad are 18 times higher than in their home country.
“European economies are on their knees because of the pandemic. So it’s now more important than ever that banks and other multinational companies are seen to pay their fair share of tax”, said Elena Gaita, senior policy officer at Transparency International EU.
The organisation once again calls on the EU Council to end the deadlock over the proposal for country-by-country tax transparency reporting which would oblige companies to make public certain accounting data such as their turnover (see EUROPE 12384/3). It also calls on the German EU Council Presidency to include this point at the next meeting of the ‘Competitiveness’ Council of the EU.
See the report: https://bit.ly/3mjssvo (Original version in French by Marion Fontana)