By Administrator_ India
Top banks in Europe continue to use tax havens to book chunks of profits, a trend that has changed little since 2014 despite country-by-country disclosures becoming mandatory, the EU Tax Observatory said in a report on Monday.
The independent research body, co-financed by the European Union, said disclosures from 36 major European banks showed they booked a total of €20 billion ($23.77 billion) or about 14 percent of total profits, in tax havens, even though few were employed there.
According to The Guardian, banks said to enjoy a particularly low effective tax rate on their profits, of less than 15 percent, including Barclays, HSBC, and NatWest — which changed its name from Royal Bank of Scotland last year. The effective tax rate is calculated as the ratio between aggregated tax paid and profit posted, across all jurisdictions.
A spokesperson for HSBC told The Guardian that the bank did “not employ tax avoidance strategies, including those designed to artificially divert profits to low-tax jurisdictions”. A spokesperson for Barclays said the bank was the fifth-largest UK taxpayer and paid taxes across the jurisdictions in which it operated.
The EU Tax Observatory’s research further suggests the UK exchequer would be the biggest beneficiary if any global minimum tax rate were enforced on Europe’s banks, in part due to the size of the banks headquartered in that country.