HAMILTON, Bermuda, Thursday March 30, 2017 – Oxfam showed no signs of easing its pressure on Bermuda’s international business sector, listing the island in a report on the use of tax havens by Europe’s 20 biggest banks published on Monday.
The report, Opening the Vaults, researched by Oxfam and Fair Finance Guide International, showed that European banks, including HSBC, Barclays, RBS, Lloyds and Standard Chartered posted profits of £18 billion (US$22.5 billion) in what it called global tax havens.
Oxfam claimed the UK banks paid just seven percent tax on their profits to UK-linked tax havens, compared to the UK corporate tax rate of 20 percent.
According to the report, Bermuda held nearly US$591 million in profits for the Euro top 20 in 2015, compared to US$205 million in the Caymans, US$21.7 million in the British Virgin Islands and US$206 million in the Bahamas.
However, the accuracy of the data was under question, as the same report later claimed that Bermuda had profits of Us$104 million — a massive US$487 million difference.
Of that US$104 million, the report attributed nearly US$86 million in profit to HSBC Bermuda.
UK-based HSBC is the only European bank among the four with a physical presence on Bermuda.
Oxfam however cited the French multinational Société Générale as generating profits in Bermuda though it has no physical office.
In response to the latest report Economist Peter Everson told the Royal Gazette that HSBC did not set up in Bermuda on its own.
He stressed that the island “was not into international banking”.
“We don’t have room for international banking. That’s why we don’t have international banking here,” he said.
The 52-page report also listed Bermuda among “selected small tax havens and bank activity” for 2015.
The report listed 2015 Bermuda figures for European-based banks as a turnover of nearly US$309 million.
The Oxfam report concluded that, “despite the limitations of the information provided…for measuring the effective tax rate, it does reveal that these European banks have not paid a single euro of tax on US$416 million of profits made in seven of these smaller countries.”
It added that the findings underline the role that these countries are playing in the “haemorrhaging of global tax resources by competing against each other to offer ever more favourable tax regimes to global corporations”.
Oxfam reiterated calls for a shift on corporate tax and significant international and European tax reforms.