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PEOPLE’S NEWS -Issue No. 165 - 8th April 2017 - How Banks are Avoiding Tax
economics and finance |
Thursday April 13, 2017 17:29 by 1 of indy
And lots of other stories too including a look at NATO
Yet another issue of the bi-monthly People's News has been published just last week and it carries an important story reproduced here on how the banks are avoiding paying tax, some at low rates comparable to the Apple deal at 2%.
There are other important articles carried too including a look inside NATO and how it's creeping influence over the EU is growing.
Yet another bank rip-off—facilitated by the Irish government
A look at NATO’s web site
Yet another bank rip-off—facilitated by the Irish government
Strong evidence has emerged that Ireland is not only facilitating significant corporate tax avoidance by companies such as Apple but extends this generosity to large European banks, a number of which fleeced us during the financial crisis.
A study by Oxfam of Europe’s twenty biggest banks — sixteen of which operate in Ireland — was made possible by new EU transparency rules, which require banks to publish information on the profit they make and the tax they pay in every country in which they operate.
The research found that a disproportionate amount of the profit of the biggest European banks is reported in Ireland, with these banks making more than €2.3 billion in profit here in 2015 on a turnover of €3 billion — a massive profitability rate of 76 per cent, which is four times higher than the global average. Only the Cayman Islands had a higher average profitability, with an astonishing 167 per cent.
Ireland also appears to be a very productive site for European banks, with only the Cayman Islands, Curaçao and Luxembourg having a higher average profit per employee. An average employee in Ireland generated €409,000 in profit in 2015, more than nine times the world average. The Spanish bank BBVA stands out in this respect: while the bank’s employees generated an average profit of €33,000 each, an average employee in Ireland generated €6.8 million — more than two hundred times as much.
The sixteen biggest European banks operating in Ireland examined in the research paid an average effective tax in Ireland of no more than 6 per cent — half the statutory rate of 12˝ per cent — with three banks (Barclays, Royal Bank of Scotland, and Crédit Agricole) paying no more than 2 per cent.
Countries are being denied large amounts of potential tax revenue, thus contributing to inequality and poverty, as governments are forced to decide between increasing indirect taxes, such as value added tax, which are paid disproportionately by ordinary people, and cutting public services, which has the greatest impact on the poorest.
At the same time, increased profits as a result of lower corporate tax create a benefit for wealthy companies’ shareholders, further increasing the gap between rich and poor.
The cost to the Irish exchequer of loopholes that facilitate banks in paying such low rates of tax is rarely publicly documented and accounted for. For example, if the profits of Royal Bank of Scotland had been taxed at the statutory rate of 12˝ per cent the bank would have paid €120 million in additional taxes, which would have paid for a lot of doctors, teachers, and care workers.
Transparency measures, such as EU rules that make corporations publicly report on each country where they make their profits and pay their taxes, are vital tools in the global fight against tax-dodging. (The Irish government is opposed to the public element of this reporting.) However, a new proposal by the EU Commission designed to extend public reporting to all big companies needs to be enhanced. The proposal is limited to companies with a turnover of €750 million or more, a measure that would exclude up to 90 per cent of transnationals, and does not require companies to report on their activities in all the countries in which they operate, including developing countries.
The Oxfam report, https://www.oxfam.org/sites/www.oxfam.org/files/bp-open...n.pdf "Opening the vaults: The use of tax havens by Europe’s biggest banks ,” gives a breakdown of the bank data. More statistics from the report:
• Luxembourg and Ireland are the most favoured tax havens, accounting for 29 per cent of the profits that banks declared in tax havens in 2015.
• Banks often pay little or no tax on the profits they declare in tax havens. European banks paid no tax on €383 million of profit they declared in seven tax havens in 2015. In 2015, European banks declared at least €628 million in profits in tax havens where they employ nobody.
• Tax havens account for 26 per cent of the profits made by the twenty biggest European banks — an estimated €25 billion — but only 12 per cent of banks’ turnover and 7 per cent of the banks’ employees.
• Subsidiaries in tax havens are on average twice as lucrative as those elsewhere. For every €100 of activity, banks make €42 of profit in tax havens, compared with a global average of €19.
• Some banks are reporting profits in tax havens while reporting losses elsewhere. For example, Deutsche Bank registered low profits or even losses in many major markets in 2015 while making almost €2 billion in profits in tax havens.
And the second story in the issue is:
A look at NATO’s web site
The degree to which cooperation between the European Union and NATO has grown during the last couple of years — with the active participation of the Irish government, and latterly with the participation of Enda Kenny in NATO EU discussions at the EU Council meeting last December — is amply demonstrated by a cursory look at NATO’s web site.
The following extracts illustrate the accelerated pace of cooperation between the EU and NATO. It is clear now that the putative EU army will be essentially a part of NATO — just like the old Western European Union, abolished by the Lisbon Treaty. The difference this time is that Ireland will be fully integrated in the alliance.
“Sharing strategic interests and facing the same challenges, NATO and the European Union (EU) cooperate on issues of common interest and are working side by side in crisis management, capability development and political consultations. The EU is a unique and essential partner for NATO. The two organisations share a majority of members and have common values” ( “ Relations with the European Union ” http://www.nato.int/cps/en/natohq/topics_49217.htm ).
“At the NATO Summit in Warsaw in July 2016, the two organisations outlined areas for strengthened co-operation in light of common challenges to the east and south, including countering hybrid threats, enhancing resilience, defence capacity building, cyber defence, maritime security, and exercises.”
These were included in the joint declaration ( http://www.nato.int/cps/en/natohq/official_texts_138829...le=en ) issued by the secretary-general of NATO, the president of the EU Council, and the president of the EU Commission.
“Allied leaders underlined that the European Union remains a unique and essential partner for NATO. Enhanced consultations at all levels and practical co-operation in operations and capability development have brought concrete results. Over 40 measures to advance NATO-EU co-operation in agreed are as were approved by NATO foreign ministers in December 2016.
“NATO’s current Strategic Concept, issued in November 2010, clearly states that an active and effective EU contributes to the overall security of the Euro-Atlantic area. The EU’s Lisbon Treaty ( in force since end 2009) provides a framework for strengthening the EU’s capacities to address common security challenges.”
NATO and the EU meet regularly to discuss issues of common interest. The secretary-general of NATO engages with his EU counter parts and on numerous occasions has addressed the EU Parliament’s Foreign Affairs Committee, in joint session with the sub-committee on Security and Defence. Meetings also take place at the level of foreign ministers, ambassadors, military representatives, and defence advisers.
There are regular staff to staff talks at all levels between NATO’s International Staff and International Military Staff and their EU counter parts (European External Action Service, European Defence Agency, EU Commission, and EU Parliament). Permanent military liaison arrangements have been
established to facilitate co-operation at the operational level. A NATO Permanent Liaison Team at the EU Military Staff has been operating since 2005, and an EU Cell at SHAPE (NATO’s strategic command for operations in Mons in Belgium) was set up in 2006.
The conclusions and common set of proposals emerging from the EU Council meeting in December are available in a document ( http://data.consilium.europa.eu/doc/document/ST-15283-2...n/pdf ) issued by the EU Council.
And all this is concealed from the Irish electorate through a process of smoke and mirrors while we become in effect a nominally militarily neutral but de facto member of NATO, along with Sweden and Finland.
It’s time we all sat up and took notice before it’s too late.
The full issue of People's News can be downloaded at the link below or see the attachment here.
Transnational profit per employee, 2009 (€ 000)
PEOPLE’S NEWS -Issue No. 165 - 8th April 2017