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Civilisation has operated in two ways - To make one part of society more affluent and the other more wretched than would have been the lot of either in a natural state
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Where Our Power to Execute Our Natural Rights is Perfect, Government has No Legitimate Jurisdiction
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HELP PUT AN END TO CORRUPTION

30/10/2020: ? Spooky corporate taxes ?
Hi Friend
Tomorrow is Halloween, and there is no shortage of spooky corruption scandals to report on. The ghoulish behaviour of global banks and their sinister deeds are in the lantern light this year. 

Just a couple of months ago, the FinCEN files showed how major banks facilitate cross-border corruption. This week, we highlighted how the tax affairs of Europe’s largest banks are immersed in murky waters.  

Illustration: Transparency International EU
Transparency International EU has examined the financial data of Europe’s largest banks from 2015 to 2019 and revealed the lengths to which banks go to reduce their tax bills. The majority routinely conduct operations in low-tax or zero-tax jurisdictions, so much so that 11 per cent of banks’ global operations during these years were effectively tax-free.

Just as frightening, 29 out of 39 banks appeared to be declaring high profits in jurisdictions where they do not employ anyone, suggesting widespread profit-shifting. For example, Deutsche Bank – already haunted by several scandals – reported profits of €418 million from its Maltese operation, which has been unstaffed since 2016.  

As our colleague Elena Gaita said, “European economies are on their knees because of the pandemic, so it’s now more important than ever that banks and other multinational companies are seen to pay their fair share of tax.” 

And pay their fair share of tax in countries where banks make their profits they should. 

These revelations have only been possible because, in 2015, the EU required banks to publish their financial data on a country-by-country basis. Since 2016, an imperfect, but similar rule has been in place for the multinationals operating in thenotoriously risky oil, gas and mining sectors. A few months ago, we also called on a U.S. regulator to improve disclosure measures for companies in these sectors regarding payments to foreign governments.  

Country-by-country reporting of financial data is a powerful method for preventing and detecting not just fishy tax practices, but also cross-border corruption. However, even within the EU, the same rules don’t apply to other types of business.  

The legislative process aimed at extending these reporting rules to large multinationals from all other industries is currently stuck in the EU Council, with several Member States still strongly opposed to the measure. We are now asking Germany, as president of the Council in 2020, to prioritise the matter and help ensure that the EU puts common good above the interests of multinational companies, even if they give generously to political parties. 

Until then, how about dressing up as EU banks for this year’s Halloween costume? Because it’s frightening what they have been getting away with.  

 
What do you think? Let us know @anticorruption.
 
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