Big banks answer to MEPs on tax

Banks answered MEPs questions on their taxation strategies

On Monday, tax directors and senior executives from Crédit Agricole, ING, Nordea, UBS and Unicredit appeared in front of the European Parliament’s TAXE Committee. This “exchange of views” was part of the Committee’s effort to learn more about banks’ role in their client’s tax strategy. It came just days after a similar hearing involving Apple, Google, McDonalds and IKEA.

There were few surprises or dramatic revelations on Monday. Witnesses were unflappable, despite the best efforts of some MEPs. However, we did learn that:

  • ING has a presence in some “tax havens,” but said this was due to regulatory not tax reasons
  • Crédit Agricole has five “small structures” in the British Virgin Islands, but said that these are either closed or soon to be closed
  • Santander has three offshore entities in Jersey and the Isle of Man, but legacy issues prevent them from closing
  • Crédit Agricole received a tax credit from the French state, which the bank used for research. The bank did not consider this to be a subsidy.
  • UBS’ response to a vote in favour of Brexit would depend on the “facts and circumstances”, and the issue was “complicated”.

After the torrent of publicity that has followed large multinationals over their tax strategies in the last year, it’s not surprising that these banks spoke favourably about efforts to prevent aggressive tax planning. The banks also stressed that they didn’t offer their clients tax advice, as they offered banking services first and foremost.

Deutsche Bank and RBS will appear before the TAXE Committee after the Easter break.