October 13, 2011 in News
Quarter of FTSE 100 subsidiaries located in tax havens (guardian.co.uk):
The extent to which FTSE 100 companies use tax havens for their operations is revealed in a database of their subsidiaries compiled for the first time by the development charity ActionAid.
The 100 largest groups registered on the London Stock Exchange have more than 34,000 subsidiaries and joint ventures between them. A quarter of these, over 8,000, are located in jurisdictions that offer low tax rates or require limited disclosure to other tax authorities.
UK companies are required by law to report a list of their subsidiary companies together with their country of registration to Companies House. However, many of the FTSE 100 have failed to do so in the past. Disclosure of the full list by all 100 groups is the result of a formal complaint made by ActionAid to Companies House and a subsequent investigation by the business secretary, Vince Cable.
It is the first time a comprehensive list of subsidiaries has been collected. There are several legitimate reasons for multinational companies to have subsidiaries in countries around the world, but the extent to which the largest UK-listed companies’ business is conducted offshore in jurisdictions classed as tax havens has been seized upon by campaigners calling for a clampdown on corporate tax avoidance.
ActionAid has analysed the list according to the definition of tax havens and secrecy jurisdictions compiled by the government accountability office of the US Congress, including in addition the US state of Delaware and the Netherlands, which are not on the GAO list but are acknowledged to offer tax and minimal disclosure advantages to foreign companies. By this measure, it emerges that 98 of the FTSE 100 companies use tax havens, with only Fresnillo, a Mexican-based mining company, and Hargreaves Lansdown, a Bristol-based financial services group, declaring no offshore subsidiaries.
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