Spain’s biggest companies have greatly increased their presence in tax havens, with the number of subsidiaries established in these tax-lite territories up 44% during 2013, the worst year in the country’s economic crisis.
The IBEX35 companies upped the number of branches in tax havens from 561 to 810 during that year, new research finds.
Financial flows to tax havens – from Delaware and Jersey in the US The Netherlands and Ireland, to Luxembourg, Switzerland and the Cayman Islands – account for 24% of total Spanish foreign investment, through a transfer of capital between subsidiaries ( activity that amounts to about a quarter of overseas investments by Spanish companies. )
These and other tax dodging antics by Spanish multinationals coupled with the dire state of the Spanish economy saw the tax take fall 56% between 2007 and 2014, a 25 billion euros loss the Spanish Exchequer, enough to double unemployment benefits this year In a country with one of the highest jobless rates in Europe.
During this period Spaniards at risk of poverty soared by 2 million to 27% of the population.
The effective tax rate paid by large companies in Spain is 5.3% compared to 16% paid by small and medium sized companies, according to Spain’s tax authorities. Had large companies paid as much in tax as SMEs the 8.2 billion euros raised would have been enough to fund sixfold social care services for all the 1.2 million people in Spain who need them.
Nueva Tribuna