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.
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.
The Exporting Corruption report shows that some of Bangladesh’s biggest trade partners – including India, China, Hong Kong and Canada – are some of the worst enforcers against foreign bribery. It is a stark reminder for the country that they have the most to lose if they turn a blind eye to their trade partners’ practices.
We condemn the decision by the Constitutional Court of Ukraine that removed the powers of the National Agency on Corruption Prevention to verify officials’ declarations, decriminalised related violations and closed the asset registry to the public. This decision is a step backwards in the anti-corruption reforms in the country, and we urge it to be addressed immediately with legislative action.