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European companies in the paradise of lost taxes

Added 27 Jun 2013

A new report by Eurodad member organisation CCFD-Terre Solidaire and the institute CERAS concluded that the 50 biggest companies by turnover in Europe all have a presence in tax havens around the world. The results of this investigation are timely as the fight against tax havens is now high on the political agenda at the EU, G8 and G20 levels. Thanks to increasing political mobilisation behind the issue and politicians’ recognition of the need for change, civil society’s proposals in this area are starting to be taken into account. However, this new report highlights that more ambitious measures are needed.

The report uses various different definitions of what a tax haven is. However, whichever definition is used, the authors reach the same conclusion: Europe’s top company groups are heavily present in tax havens. Through an analysis of corporate documents, the report looks more specifically at the degree of information available on companies’ subsidiaries, including those related to their presence in tax havens and the extent to which companies used country-by-country reporting.

Key findings:

Presence of the 50 largest companies in Europe in tax havens:

  • All of the largest 50 companies in Europe by turnover are present in tax havens; their subsidiaries in tax havens account for 29% of their overall subsidiaries abroad.
  • 63% of the companies’ offshore subsidiaries are located in the EU.
  • The banking and insurance sector has the most presence in tax havens, with 12 banks only accounting for half of the most opaque offshore subsidiaries.

Transparency:

  • Information available in corporate activity reports about companies’ subsidiaries is scarce, with only 60% of the companies providing a full list of their subsidiaries online.
  • None of the 50 companies is providing proper country-by-country reporting, including at a minimum information on the activity, turnover, subsidies received and taxes paid, either per subsidiary or per country.

 Recommendations:

  • The online publication of a full list of subsidiaries and related information on their location and activities should be made compulsory.
  • National beneficial owner registries should be introduced.
  • Country-by-country reporting should be extended to all economic sectors, as well as to all G8 and G20 countries.

These recommendations are even more crucial in the context of the G8 conclusions, which were not as ambitious as they should have been, according to the Tax Justice Network.

Read the full report (available in French only).