Home Finance Tax havens used by European Banks for profits

Tax havens used by European Banks for profits

epa05208888 A photograph made available on 13 March 2016 showing a Euro symbol projected onto the European Central Bank (ECB) in Frankfurt am Main, Germany 12 March 2016. The European Central Bank (ECB) is participating in Luminale, a light show that takes place every two years in Frankfurt. Both the ECB?s main building by the river Main and the Eurotower in the city centre will be illuminated by a ?symphony? of light consisting of bars, lines and circles ? primarily in blue and yellow, the colours of the European Union. It will be based on Ludwig van Beethoven?s Prelude to the Ode to Joy, the European anthem. The euro symbol will be projected onto the south facade of the main building and will be visible to passenger planes on approach to land at Frankfurt airport. The light show takes place every day from 20:00 CET to midnight from 13 to 18 March 2016. EPA/BORIS ROESSLER

Top banks in Europe to book chunks of profits, continue to use tax havens. This is a trend that has changed little since 2014. Even though, country-by-country disclosures becoming mandatory, the EU Tax Observatory reported this. The independent research body, which is co-financed by the European Union, said that the disclosures which are from 36 major European banks showed that they booked a total of 20 billion euros ($23.77 billion). This is about 14% of total profits, in tax havens. Above all only very few were employed there.

Profits booked by banks in tax havens work out at around 238,000 per employee. The report compared this with 65,000 euros in non-tax havens. They also added that this suggests that the profits booked in tax havens are primarily shifted out of other countries where service production occurs. Taxes have become a sensitive issue. Because the governments are plugging holes in the economy due to COVID. This is seeking to agree on a common rate for taxing Big Tech. Country-by-country reporting to shed light on the inner workings of banks is failing to change behavior. Initiatives such as a global minimum tax with a 25% rate may be necessary to curb the use of tax havens by the banking sector.

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