Mar 03 2011

HSBC escapes tax using U.S. as a tax haven

Posted by: Nick Shaxson in: Thoughts

From Private Eye:

HSBC tells the Eye that is paid £486m in corporation tax in 2010 – unprecedented openness which may be because this is about four times what tax-pariah Barclays paid.  But with a worldwide tax bill of just 12 percent, globally it pays half Barclays’ rate.  And even the half a billion isn’t a big bill when European profits, most of which are earned in the UK, were £2.8bn.

Much of the reason for HSBC’s low tax contribution is the huge tax avoidance scheme run through the Netherlands, exposed in Eye 1278.

The latest report also reveals that HSBC is artificially diverting profits into a new tax haven for the bank: the U.S. Because it has made big losses across the Atlantic, shifting its capital there as a “tax planning strategy” – but not for any commercial purpose – further reduces the world’s local bank’s paltry tax payments elsewhere, almost certainly including the UK.

The HSBC 2010 accounts provide some details on pages 294-295.

one comment

The Corporation 4th April, 2011 6.36 am

[…] (from drug barons or corrupt dictators for example) may be laundered into clean money. Or in which huge corporations go without paying the right tax (I don’t buy any argument that firms should avoid large tax […]

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