Spain loses nearly 10,000 million euros a year in tax collection due to the flight of companies and the rich to tax havens (called ‘tax havens’ from the rhetoric of evaders). Around 9,000 million due to the inability of the Tax Agency to tax the profits that multinationals hide in Caribbean and Atlantic islands, and also in the Netherlands, Ireland, Switzerland or Malta. And another 1,000 million of assets that our richest taxpayers divert to these same ‘black holes’ for the Treasury.
A report from the Tax Justice Network (Tax Justice Networkin English) places our country as the fifteenth in the world that misses out on the most income. Their calculations amount to a loss of almost 500,000 million euros worldwide, and 175,000 million in the European Union (EU).
In the middle of the G20 fiscal policy forum in Brazil, this Monday, the President of the Government, Pedro Sánchez, called for the creation of a global wealth tax. In the same line, in statements to ‘The Guardian’the Minister of Economy of Spain, Carlos Body, urged the world’s main countries to “be brave” and redouble efforts to reach an agreement on a global and “coordinated” minimum tax for the world’s 3,000 billionaires, arguing that recent Elections have shown that citizens are demanding a “redistribution of wealth.”
In July, in a historic consensus, the world’s largest economies agreed at the G20 to “cooperate” to design this tax on the super-rich. This Tuesday, they will have to comment again on this tribute promoted by the Brazilian Presidency and designed by the economist Gabriel Zucman, as explained in this information.
“Government after government has dedicated itself to bowing to the interests of the richest people, drastically lowering taxes and allowing their fortunes to increase to unimaginable limits, more money than anyone could ever spend in a lifetime. Heads of state and government at the Rio summit can end the decades-long attack on fairer taxation encouraged by the super-rich. Only then can we begin to heal the wounds of inequality that are fragmenting our societies,” argues Susana Ruiz, head of tax justice at Oxfam.
This leadership of Sánchez and the International Tax Justice Corps collides with the difficulties within our borders to advance the transposition into the Spanish Law of the EU directive on a minimum tax of 15% on the profits of multinationals. A measure that extends to 50 countries. But, above all, it grates in the face of problems in complying with the coalition government’s commitment to create two new taxes on banks and energy companies that give continuity to the temporary taxes that were designed in 2022 for their extraordinary benefits due to increases. of interest rates and the inflation crisis.
“The potential benefits of reforming international tax rules are enormous and would be shared among everyone,” recalls the Tax Justice Network report. “Taxes are our social superpower: perhaps the best tool we have to organize ourselves and live better, healthier and happier. “Cross-border tax abuse is the biggest obstacle to effective and progressive taxes that are essential to fulfilling that promise, as well as finding a path to the level of financing necessary to address the urgent climate crisis,” this document states.
According to the analysis of this organization, “43% of these losses are due to the eight countries that continue to oppose a UN tax convention: Australia, Canada, Israel, Japan, New Zealand, South Korea, the United Kingdom and the United States. Joined. These countries represent only 8.4% of the global population.”
The conclusions are devastating. “The escalation of tax abuse by multinational companies has not been stopped by the OECD’s seemingly endless reform efforts. And although this failure led some countries to cut corporate tax, in the hope that this would protect them, the data now shows that it has simply added to the losses they have suffered,” he explains.
“The United States has long dominated the OECD, often preventing EU proposals from advancing. But the United States has been unable or unwilling to adopt the resulting reforms itself, and now has one party in government. [el Republicano de Donald Trump] which has repeatedly threatened countries for adopting OECD reforms (including the EU, on elements of the global minimum tax), and for taking alternative measures (such as Canada, with its adoption of a digital services tax in response to the absence of OECD progress)”, continues the Tax Justice Network.
Where are the tax hideouts?
The British Virgin Islands, the Cayman Islands, Bermuda… are the tax havens most present in the collective imagination. However, on the list of main countries complicit in the fact that multinationals manage not to contribute everything they should in corporate tax are almost all the main powers. Among them, Ireland, which “for the first time has entered the top 10.”
The Tax Justice Network develops an index that evaluates the room for maneuver that a country’s laws and regulations offer for the abuse of said tax, and the result shows that the United Kingdom and its dependent territories (also known as the ‘second empire ‘ British) are responsible for 23% of global corporate tax losses. “The ‘axis of tax evasion’ (the United Kingdom and its ‘second empire’, plus the Netherlands, Luxembourg and Switzerland) are jointly responsible for 33%. In total, OECD member countries and their dependencies account for more than 6 out of every 10 dollars lost,” the report laments.
International “coordination” is essential for governments that really want fairer taxation. “The greater the coordination, the easier it will be to implement” the tax on the super-rich or advance minimum taxation of large companies, Corp admits, in statements reported by ‘The Guardian’. “It minimizes the costs of political capital,” he adds, in reference to the opposition that arises to these proposals from “monopolistic” sectors or with “dominant positions”, such as banking or energy in Spain. An opposition that is supported by the richest and right-wing parties, as Junts, PNV and, of course, the Popular Party (PP) are currently doing.
The corporate tax gap between Spain and the eurozone
The corporate tax in Spain collected just over 35,000 million in 2023. These revenues are still very far from their maximum in 2007, when they reached almost 45,000 million and accounted for 19% of all collections—that was an extraordinary year due to the real estate bubble. At the moment, this ratio remains at 12%.
Regarding GDP, the tax on company profits represents 2.8%. A recent forecasting exercise by the Independent Authority for Fiscal Responsibility (AIReF) indicates that this contribution from Corporate Tax will barely grow from 2023 to 2029, as can be seen in the graph. The gap with the eurozone is 0.6 points of GDP, close to 8 billion euros.
Meanwhile, “the positive accounting result [la medida tributaria de las ganancias, similar al ebitda o beneficio bruto de la contabilidad]” of all companies in Spain is indeed at historical highs, after skyrocketing 110% since 2012. In the same period, corporate tax revenues have barely grown by just over half, 63%.
The minimum tax of 15% for multinationals, where applicable, seeks to cover the “tax lairs” that larger companies find. Although the most progressive views regret that the transposition of the community directive has not gone beyond 15%, which they consider “very low”, and warn of the exemptions contemplated in the current text for certain “investments.” Along with tax hideouts, bonuses and compensation for losses from other years are precisely the biggest holes in the corporate tax in our country.
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