This is a timely report, as the creation of a global minimum tax of at least 15% for companies looms, this major tax reform carried out by the Organization for Economic Co-operation and Development (OECD).
The study, published Monday, September 6 by the European Taxation Observatory – led by economist Gabriel Zucman, associate professor at the University of Berkeley (California) – reveals that the main European banks are largely taking advantage of tax havens to reduce their taxes. According to the document, 25% of the profits made by these financial institutions are recorded in countries where the effective tax rate is less than 15%. “Tax havens represent 1% of the world’s population, 2% of global GDP, and European banks record a quarter of their profits there. There is an elephant in the room ”, says the economist specializing in financial markets Gunther Capelle-Blancard, professor at the University of Paris-I-Panthéon-Sorbonne.
To carry out this study, the research observatory, hosted by the Paris School of Economics, analyzed the way in which 36 major European banking establishments have allocated their profits between different countries since 2014. It is indeed from this date that European banks were forced to publish several activity data, country by country.
“Room for maneuver”
The researchers also compiled a list of seventeen countries and territories (including Luxembourg, Hong Kong, Jersey, Guernsey, Ireland, Malta, the Bahamas or Bermuda) considered as tax havens for banks, by combining two indicators: an effective tax rate less than or equal to 15% but also a productivity of banks per employee particularly high. Considering this narrow scope, the observatory estimates that European banks record 20 billion euros each year, or 14% of their profits, in these tax havens. A surprisingly stable share since 2014, despite the institutions’ obligation of transparency.
“ The profits recorded by banks in tax havens are abnormally high: 238,000 euros per employee, against around 65,000 euros in countries which are not tax havens “, specifies the study. Enough to “Suggest that the profits recorded in tax havens come mainly from other countries, where the services are produced”.
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