EU countries lose an estimated 59.3 billion euros a year in tax revenue because multinational companies move profits between countries, according to the Tax Justice Network. About 8 billion euros of that loss is linked to the United Kingdom, its overseas territories and Crown Dependencies, equal to 13.6 percent of the EU total.
The estimate accompanied the update of the Corporate Tax Haven Index on 5 November. The most recent country data relate to 2022. Profit shifting means companies record earnings where tax rates are lower rather than where their activity takes place.
Where the losses fall
France has the largest estimated loss in the EU, at 13.1 billion euros in 2022. Germany follows with 11.8 billion euros, and together the two account for 42 percent of the EU total.
Spain is estimated to lose 4.8 billion euros a year and Poland 4.7 billion. Lithuania has the lowest figure in the bloc, at 59 million euros.
The UK connection
The index places the British Virgin Islands first, the Cayman Islands second and Bermuda third. The UK ranks 19th, and the index attributes 31 percent of global corporate tax abuse risk to the UK and six territories.
Also Read
Tax Justice Network index lead Moran Harari said: “The results once again show the major role of the UK in global corporate tax abuse risk; the UK and EU are among the parties that could benefit most from the proposed UN international tax convention but oppose proposed changes; tax competition harms everyone.”
The OECD has estimated government revenue losses from profit shifting at 100 to 240 billion US dollars a year.
Source: Tax Justice Network
