122 Spanish multinationals paid in taxes 18.3% of their global profit in 2018, compared to the legal rate of 25% in force in Spain. 33% of them underwent even less pressure, 7.54%, and 20 large groups paid to the treasury only 1.9% of their global profits, according to the data that the same corporations have provided to the Tax Agency to through the 231 form of declaration of information country by country.
The Tax Agency has reflected these data in the third edition of its Country by Country report (in English, Country by country report or CBC), which breaks down how much large corporations with a Spanish parent company with worldwide turnover of more than 750 million euros pay in corporate tax worldwide: 122 multinationals ―10 more than the previous publication― and their 15,085 subsidiaries, 67 % of them (10,197) foreign. These groups paid 16,800 million euros in corporate tax globally in 2018 on a profit of 91,809 million.
The report comes at a time of tension between the Government partners over the approval of the General State Budgets, partly on account of corporation tax. United We can insist that a minimum rate of 15% be set, as established in the coalition agreement with the PSOE and in line with international negotiations within the Organization for Economic Cooperation and Development (OECD), that has already reached an agreement between more than 130 countries to establish a floor of at least 15% for the largest corporations – technical details on the agreement are expected at the G-20 summit in late October. The reluctance of the PSOE, however, is holding back a decision on the matter.
The information published this Monday is the result of the improvement registered in the exchange of information at the international level and responds to the commitments that Spain has acquired with the OECD within the framework of the BEPS agreements (Erosion of Bases and Transfer of Benefits), aimed at reform international tax rules to curb tax avoidance by large companies.
Cross-border tax abuses subtract a significant portion of revenue from the public coffers each year: about $ 427 billion, according to estimates by the independent Tax Justice Network. Of these, 245,000 million are the result of the diversion of profits from large multinationals to territories with low or no taxation. The remaining 182,000 million are due to the concealment of assets of the wealthiest, another bloody problem for local farms. This same Sunday the Pandora Papers, a global investigation led by the International Consortium of Investigative Journalists (ICIJ), of which EL PAÍS is a part, which has brought to light the opaque businesses of politicians, millionaires and artists from more than 90 countries.
The report of the Tax Agency does not allow to know the name of the companies that are part of the analysis, and until the last publication it did not even break down the territories in which the groups operate. This edition includes for the first time the information on variables and ratios such as the number of workers or productivity per worker and the detail by country in the case of Europe, and by continent for the rest of the jurisdictions. This expansion of information responds to the agreement reached last week in the European Council on the new community directive that obliges the largest corporations of the bloc to break down the profit they obtain and the taxes they pay in the different jurisdictions of the EU and in those territories that the EU considers tax havens.
Like previous editions, the statistics reflect a great dispersion of rates and distortions between what is taxed and what is earned. The 77 companies with effective rates below 20% represent 26.5% of the tax paid by the total group, although they account for almost half of the turnover (49.3%), the profit (53.4%), employees (53.2%) and capital (54%).
The 20 corporations that paid an average rate of 1.8% in 2018 (336 million tax on a profit of 17,833 million) accounted for only 2% of the total tax paid, but represented more than 16% of sales, almost 20 % of profit, 13.1% of workers and 12.7% of capital 12.7%.
The statistic also highlights that the multinationals concentrated 53% of their global turnover in Spain in 2018, compared to 29% that declared outside the European Union. The productivity per employee declared is also higher – 56% higher than in non-EU countries – and total assets – 66% -, although in terms of profit and tax paid only 42% and 39% of the total are declared, respectively.