The first paragraph of the Introduction in Treasure Islands finishes with this sentence:
In each country, the largest user by far was a bank.
This is about the biggest users of tax havens among corporations around the world.The purpose of this blog is to point to the data sources this relies on. None of this data is new – nevertheless the data itself, and some of the nuances in it, are striking.
First, there’s the U.S. Government Accountability Office (GAO) whose rankings, in terms of numbers of tax haven subsidiaries, go like this
- Citigroup 427 subsidiaries
- Morgan Stanley 273
- News Corporation 152
- Bank of America 115
- Procter & Gamble 83
- Pfizer 80
- Marathon Oil 76
- Pepsico 70
- Wachovia 59
- Lehman 57
- JP Morgan 50
The ones in bold are the financials – though note the predominance of pharmaceutical companies and one important (ahem!) media company. Also note that the GAO uses a restrictive list (p12) of tax havens, missing out such massive players as the Netherlands and the UK (for a better list, see here.)
This is complemented by a survey of the Netherlands, the UK and France. Whereas the GAO only found that 83% of top U.S. cos had tax haven subsidiaries, this survey finds that:
As in the USA, the largest user of tax havens in France and the UK was a bank. In the USA the largest user was Citigroup, in France it was BNP Paribas and in the UK it was Barclays plc.
The report surveyed 95 of the largest quoted companies in the UK, the Netherlands and France. Of those companies all but one had tax haven subsidiaries. 99 per cent of the European quoted companies surveyed operate in tax havens. The most popular tax haven in the world is Cayman Islands.
And there was this, providing more fine-grained detail:
All the UK companies had tax haven subsidiaries. Barclays plc had the most (315), just beating BP plc (294) into second place. The Netherlands produced just one company (from a sample of 23) without a tax haven subsidiary. In France all of the 39 companies surveyed had at least one tax haven subsidiary. BNP Paribas had most with a total of 189.
Following this, the Swiss magazine Hebdo published its own study. It does something different: it considers subsidiaries in the UK and Delaware – and discovers the banks’ use of these places to be massive. The top of the list are:
- Credit Suisse 97 (tax haven subsidiaries represent 49% of all its subsidiaries)
- Zurich Financial Services 89 (47%)
- Swiss Re 83 (60%)
- UBS 80 (42%)
- Nestlé 80 (17%)
This brings interesting new perspectives. Again, the biggest tax haven users by far are banks. And banks have an unusual share of their activities in tax havens – the other companies listed have a far smaller share of their total subsidiaries in tax havens.
So there you have it. The data. And it’s quite striking, isn’t it?