George Town, Grand Cayman
Noel Hendrickson
Europe’s biggest banks are booking an average of 20 billion euros ($23.7 billion) in tax havens every year, according to a new report.
That accounts for 14% of their total profits, the analysis found.
Published Monday, the report from the EU Tax Observatory looked into the activities of 36 systemic European banks, headquartered in 11 countries across Europe, that have been subject to mandatory country-by-country reporting on their actions since 2015.
Seventeen jurisdictions were included in the report’s tax haven list: the Bahamas, Bermuda, the British Virgin Islands, the Cayman Islands, Guernsey, Gibraltar, Hong Kong, Ireland, Isle of Man, Jersey, Kuwait, Luxembourg, Macao, Malta, Mauritius, Panama and Qatar.
The report noted that about 65% of banks’ profits were reported as being made abroad through affiliates between 2014 and 2020, with researchers documenting a misalignment between the countries where profits were booked and those where employees were located. Profits per employee were also far larger in tax havens than in other countries, according to the report, with subsidiaries in tax havens reporting high profitability and profit margins.
Researchers also pointed out that 25% of the banks’ profits were booked in countries where the effective tax rate was lower than 15%.
“Taken together, this evidence indicates a significant presence and stable use of tax havens by European banks over the years,” they said in the report.
...Read Full Story: https://www.cnbc.com/2021/09/06/european-banks-book-24-billion-in-tax-havens-every-year-report-says.html
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