Monday, September 6th, 2021
Also EU countries among them
Deutsche Bank continues to be active in tax havens
Despite numerous revelations on the tax avoidance practices of companies and private investors: Europe’s banks continue to generate significant shares of their profits in tax havens. Deutsche Bank is also right at the forefront.
Despite a series of revelations about tax havens, German and other European banks continue to use such loopholes. This was the result of a study by the independent research agency European Tax Observatory, which was published in Paris and Brussels. According to the authors, Deutsche Bank is one of the financial institutions with a “relatively high presence in tax havens”.
According to the study, the leading European banks recently booked a total of around 20 billion euros annually in 17 areas with particularly low taxes – including the Bahamas, Panama, but also EU countries such as Ireland, Malta and Luxembourg. This corresponds to around 14 percent of their pre-tax revenues. The authors emphasize that this proportion has remained stable since 2014. As a result, the so-called Lux Leaks and the Panama Papers shed light on the dubious tax practices of companies and wealthy private investors.
“Despite the increasing importance of these issues in the public debate and in politics, European banks have not significantly reduced the use of tax havens,” the authors of the study criticize. “Deutsche Bank continues to report an average of 21 percent profit in tax havens between 2018 and 2020,” the study says. However, this is less than in the period from 2014 to 2016, when the proportion was still 32 percent. The Nord LB comes to 27.6 percent between 2018 and 2020 – 0.4 percentage points more than the average of the three years before.
Deutsche Bank in fourth place
Of the 36 European banks examined with activities in tax havens, Deutsche Bank comes fourth – after the British HSBC, the Italian Monte dei Paschi (BMPS) and the British financial company Standard Chartered. Deutsche Bank stated that it operates in 60 countries. However, none of them are on the EU list of countries and areas that do not cooperate in tax matters. There are currently twelve countries and areas listed, such as the Fiji Islands or Panama – but not European member states with low tax rates, which critics in the European Parliament denounce.
MEP Sven Giegold from the Greens emphasized that the example of Deutsche Bank is a good way of showing “how a bank can use tax havens to avoid a particularly large amount of corporate taxes.” Because according to the report of the tax observatory, the money house booked an average of 22 percent of its total profit in Luxembourg, where it is taxed at an effective tax rate of only 14 percent. Giegold therefore demanded a minimum tax rate of 21 percent for large companies.
Germany and other countries are currently negotiating a worldwide minimum tax of 15 percent. It should at least partially compensate for tax losses. The independent European tax observatory advises EU politicians and is based at the Paris School of Economics. For the period from 2020 to 2021, it will be cross-financed with EU funds amounting to EUR 1.2 million.
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