World Economy

Report: French banks rely 'heavily' on tax havens

Jessica Hartogs, Special to CNBC
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France's "big five" banks make a third - close to 5 billion euros ($5.5 billion) - of their international profits in tax havens, according to a report released by Oxfam on Wednesday.

Yet, they only paid a fifth - 825 million euros - of their taxes to these jurisdictions ($914 million).

France is the first country to put into practice a European Union law which requires banks to disclose basic information on their activities and the taxes they pay in each country they operate.

With this data, the joint Oxfam, CCFD-Terre Solidaire and Secours Catholique-Caritas report "Following the Money: French Banks' Activities in Tax Havens," analysed international activities of the five largest banks in France: BNP Paribas, BPCE, Societe Generale, Credit Agricole and Credit Mutuel.

The French banks rely "heavily" on tax havens to increase their profits, according to the Oxfam study.

The banks under investigation revealed having 16 subsidiaries in the Cayman Islands with no employees from which they still declared 45 million euros ($50 million USD) in profits.

"Citizens are tired of seeing how big companies abuse weak legislation to set up tricky accounting schemes and pay very little tax. Public services in both Europe and developing countries are lacking vital resources for services such as health care and education, while ordinary citizens carry a heavier tax burden. It is time for decisive EU action to stop this shameless trickery of large companies," said Lucie Watrinet, advocacy adviser at CCFD-Terre Solidaire.

Oxfam's report also showed that the banks' "most risky and speculative" activities were nearly always located in tax havens.

A spokesperson for BNP Paribas denied the bank had been purposely avoiding taxes, reported Public Finance International.

Societe Generale and BNP Paribas did not immediately respond to CNBC's request for comment.

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