Are big banks’ profits in tax havens legal? The Commission must launch a full investigation and lift all doubts

Are big banks’ profits in tax havens legal, The Commission must launch a full investigation and lift all doubtspresident of the European Commission Jean-Claude Juncker, S&D Group president Gianni Pittella, S&D Group vice-president Udo Bullmann and S&D spo

“The Socialists and Democrats in the European Parliament today called on the European Commission to investigate potential breach of EU competition rules following the revelations of a report on the use of tax havens by Europe’s biggest banks, published by Oxfam. 

In a letter to the president of the European Commission Jean-Claude Juncker, S&D Group president Gianni Pittella, S&D Group vice-president Udo Bullmann and S&D spokesperson Pervenche Berès slam “the unacceptable use of tax havens and their favourable tax and regulatory rules by the biggest European banks”. 

“These practices are clearly a breach of fair competition”, they add.                                                                                                                         

S&D Group vice-president responsible for economic and monetary affairs Udo Bullmann said: 

“The research done by Oxfam was made possible thanks to the public Country-by-Country Reporting (CBCR) information of the banking sector required by EU legislation. 

These revelations clearly underline how efficient the CBCR is. We succeeded as a Group to include this transparency requirement for the banks and we will keep fighting to extend this obligation to every big company with an annual turnover above 40 million € with a clear breakdown for each jurisdiction, inside and outside the EU. 

"The top 20 EU banks have registered far more profits in tax havens than can be justified by their level of real economic activity taking place there. 

"The European Parliament, the European Commission and the civil society have been repeatedly saying that profits should be taxed where the economic value is created. This report proves that this is still not the case and that much more remains to be done at EU level. The European Council must reach an agreement as soon as possible on a strong public country-by-country reporting for multinational companies and release a credible blacklist of tax havens." 

S&D Group spokesperson on economic and monetary affairs, Pervenche Berès added: 

“The revelations of the Oxfam report show that a large proportion of their profits are made via these tax havens despite the banks not employing a single person in the countries concerned. This reminds us of the Apple case which led to sanctions by the European Commission. These practices are clearly a breach of fair competition. 

“We ask the Commission to launch a proper investigation to assess the potential infringement of competitions rules. Moreover, we are calling on the Single Supervisory Mechanism (SSM) to ensure that these practises are not representing a threat to financial stability. We need to be sure that the activities of the banks concerned in third countries are duly supervised by the SSM. 

“The S&D Group has been the leading force in the fight for tax justice and action against tax avoidance, tax evasion and tax havens at the EU level. These are issues of major social justice and economic efficiency."