Saturday 24 June 2017

'Strong evidence' Ireland is facilitating tax avoidance for major banks - Oxfam

Profitability in the IFSC well above international averages, report says
Profitability in the IFSC well above international averages, report says

Sean Duffy

Charity group Oxfam has said there “is strong evidence” that Ireland is facilitating significant corporate tax avoidance schemes for European banks.

In a report entitled “Opening the Vaults”, researchers at Oxfam in collaboration with the Fair Finance Guide International found that “a disproportionate amount of profits of the top European banks are reported in Ireland”.

The report found that European banks recorded profits in Ireland that were 76pc higher than the global average in 2015. Only the Cayman Islands was found to have a higher profitability rate.

Furthermore, Oxfam stated that the average employee in European banks based in Ireland generated €409,000, behind only the Caymans, Curacao and Luxembourg.

To illustrate the discrepancy between countries, the report highlights the case of Spanish bank BBVA. Overall, the average BBVA employee generated around €33,000 for the bank. However, BBVA employees in Ireland generated an average of €6.8m.

The report also found that the top European banks operating here paid an effective tax rate of no higher than 6pc.

“The massive profitability levels of European banks in Ireland suggests that large profits may be reported in Ireland as a tax avoidance strategy,” said Oxfam Ireland’s senior policy and research coordinator Michael McCarthy Flynn.

“This is creating little additional benefit to the Irish economy and tarnishing Ireland’s reputation,” he added.

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