Ireland included on international banking tax haven list

Ireland is one of 17 countries and territories named by a French think-tank as a tax haven location for big international banks.

However, no Irish bank was named on the list.

Leading European banks are booking around €20bn a year – equivalent to 14% of their total profits – in tax havens, with Barclays, HSBC and NatWest Group among those enjoying the lowest tax rates, according to a new report.

The figures emerge from an analysis, conducted by the EU Tax Observatory, of 36 big banks required to publicly report country-by-country data on their activities.

Banks said to enjoy a particularly low effective tax rate on their profits, of less than 15%, include Barclays, HSBC and NatWest – which changed its name from Royal Bank of Scotland last year. The effective tax rate is calculated as the ratio between aggregated tax paid and profit posted, across all jurisdictions.

The full list of haven locations listed by the EU Tax Observatory are Bahamas, Bermuda, the British Virgin Islands, Cayman Islands, Guernsey, Gibraltar, Hong Kong, Ireland, Isle of Man, Jersey, Kuwait, Luxembourg, Macao, Malta, Mauritius, Panama, and Qatar.

According to the report, the profits booked by banks in tax havens are abnormally high. About €238,000 profit per employee is posted by the banks in havens, as opposed to €65,000 in non-haven countries.

Even though the banks book 14% of their profits in tax havens, the percentage of staff employed in them is only 4%.

To the disappointment of policymakers and activists, the percentage of profits booked in tax havens has not changed over the last seven years despite hopes that country-by-country reporting introduced in 2014 would lead to a shift in practice.

Irish Examiner and Guardian Service