A total of £522 million of that sum was made in six UK-linked tax havens.
A CALL for banks to clean up their act has been made following the revelation that 20 of Europe’s biggest establishments posted profits of at least £18 billion in global tax havens last year.
New EU transparency rules also show that five UK banks reported combined profits of £9bn in global tax havens, 67 per cent of their overall profits.
The UK banks – HSBC, Barclays, RBS, Lloyds and Standard Chartered – paid just seven per cent tax on their profits in UK-linked tax havens, compared with the UK corporate tax rate of 20 per cent.
Research by Oxfam and Fair Finance Guide International shows that although all 20 European banks reported a quarter of their global profits in tax havens, they registered only 12 per cent of their global turnover and seven per cent of their global employees in those countries.
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Europe’s top banks relying heavily on tax havens
The 20 biggest banks in Europe have been accused of funnelling £18bn of profits through tax havens in a bid to save cash.
The British Bankers’ Association said: ‘The UK banks listed comply with the HMRC Code of Practice.’
British banks were found to have made £9bn in countries defined as tax havens by the charity – or 67 per cent of their global profits.
A report by Oxfam claimed one in every four pounds of profit made by these giant lenders in 2015 was booked in a low-tax nation.
Because profits are taxed in the country where they are earned, this allows them to keep their bills down and dole more money out to bosses and shareholders.
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Oxfam exposes tax haven habits of EU big banks
“New EU transparency rules give us a glimpse into the tax affairs of Europe’s biggest banks and it’s not a pretty sight,” said Manon Aubry, a tax specialist at Oxfam.
In the Cayman Islands for example, France’s BNP Paribas booked 134 million euros in profit tax free without a single employee present.
The report also uncovered that European banks posted 628 million euros in profit in tax havens where they employed zero staff.
“Governments must change the rules to prevent banks and other big businesses using tax havens to dodge taxes or help their clients dodge taxes,” she said.
Europe’s 20 biggest banks posted more profits in the small EU duchy of Luxembourg than they did in the UK, Sweden and Germany combined.
collected by :Victor Alphen