The Financial Mail is continuing its campaign on tax haven activity by major companies:
Hundreds of secret tax haven subsidiaries belonging to major companies have been revealed after Financial Mail exposed widespread failures of disclosure in Companies House filings.
Fifteen companies - including Marks & Spencer and insurance giant Legal & General - have admitted that they control a total of 568 subsidiaries in secretive locations such as the Cayman Islands and Jersey.
The details emerged after the firms resubmitted a list of their subsidiaries to Companies House. The firms acted after being contacted by Financial Mail following a complaint by charity ActionAid and after receiving letters from Companies House.
This is, of course, the continuation of work I began with the Tax Justice Network two years ago - and good for all who have taken it forward.
As the Mail reports:
A spokeswoman for Companies House confirmed that it had contacted-49 firms in the FTSE 100 to warn that failing to disclose makes directors liable for steep fines.
Miner Anglo American is revealed as having 30 offshore subsidiaries in the British Virgin Islands (BVI) - including Ambase Exploration ( Tanzania) Limited - and the same number in Luxembourg, including Anglo American Exploration Columbia Sarl. Anglo South American Investments Limited is based in Mauritius.
Retailer Burberry admits to having seven subsidiaries in Luxembourg, while technology giant Smiths Group has a subsidiary called John Crane Ireland Limited, based in the Cayman Islands.
Media giant BSkyB's subsidiary Oddschecker (Jersey) Limited is registered in the BVI.
A further 14 companies - including British Airways, cruise giant Carnival and supermarket group Morrisons - were in the process of filing disclosure of their subsidiaries or were at least looking into the issue.
Of course, this disclosure would be a routine part of country-by-country reporting.
The case for country-by-country reporting is becoming unassailable.
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Can the last Company Chairman and Chief Executive to leave the UK kindly turn out the light?
Maybe they could all move to that bulwark of high tax and hater of tax havens – France. Oh maybe not. Looks like they’re all at it!
Saturday, February 19, 2011
FRANCE has been told it must claim back millions of euro from companies it gave special exemptions to from paying the full rate of corporate tax.
The Irish government, in defending the country’s 12.5% corporation tax rate has been making the case that many companies in France and other countries do not, in fact, pay the high tax rates because of special exemptions.
French president Nicolas Sakrozy has been the most vocal among the EU leaders in demanding that Ireland increase its tax rate in exchange for the EU-IMF loan.
He wants to see it come closer to France’s 34.4% rate. The Irish responded pointing out that many of the country’s top companies paid no tax last year.
The European Commission took the first step towards bringing France to court because it has not recovered the money from up to 200 companies despite being warned to do so eight years ago.
The problem arose after the French government decided on a special tax regime for takeovers of ailing companies. Under it, company profits were exempt for two years from tax for companies that were set up to take over the assets of companies that had been, or were about to be, wound up.
The Commission ordered that the scheme be abolished and that the money be recovered from the companies that benefited. Earlier this year they had managed to recover money from just 27 of the more than 200 that benefited.
The Commission announced yesterday that it had recovered a total of €530 million in state aid granted to businesses illegally last year. This brought the total aid recovered over the last decade to just short of €11 billion.
This appeared in the printed version of the Irish Examiner Saturday, February 19, 2011