LONDON Reuters - Top banks in Europe continue to use tax havens to book chunks of profits, a trend that has changed little since 2014 despite country-by-country disclosure becoming mandatory, the EU Tax Observatory said in a report on Monday.
The independent research body, co-financed by the European Union, said disclosures from 36 major European banks showed they booked a total of 20 billion euros $23.77 billion or about 14% of total profits at tax havens even though few were employed there.
Profits booked by banks in non-tax havens work out at around 238,000 per employee, compared with 65,000 euros in tax havens, the report said.
The earnings booked in tax havens are primarily shifted out of other countries where service production occurs, it added.
Credit costs have become a difficult issue with cash-strapped governments plugging holes in the economy due to COVID seeking to agree on a common rate for taxing big tech, in particular.
Country-by-country reporting meant to shed light on the inner workings of banks has failed to change behaviour despite the rise of tax issues on public agenda, said the report.
More ambitious initiatives such as a global minimum tax with a rate of 25% could be necessary to curb the use of tax havens by the banking sector.