Are European Banks Operating in Tax Havens Really Avoiding Taxes?

On September 6, 2021, the EU Tax Observatory, an independent tax research institute affiliated with the Paris School of Economics, published a report titled "Have European Banks Left Tax Havens? Evidence From Country-by-Country Data."

Without even reading the report, one could guess the conclusion: European banks continue to use tax havens to avoid taxes.

Most independent tax research institutions in Europe and the U.S. are anti-tax avoidance. After all, those who support tax avoidance are busy working in law firms or accounting firms, helping clients with tax planning and earning far more money. This article will attempt to question the rationale behind the arguments made by these politically biased organizations. Let me clarify upfront: this is not an attempt to exonerate European banks from the suspicion of tax avoidance. Instead, it aims to better distinguish between real tax avoidance and perceived tax avoidance. Governments and international organizations should focus on combating real tax avoidance, not false accusations, as misguided policies would fail to effectively guide the real economy in alignment with government objectives.