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EU Loses About €59.3bn a Year to Corporate Profit Shifting, Study Finds
A Tax Justice Network study finds EU countries lose about €59.3bn a year to corporate profit shifting.
Key points
- France has the largest estimated EU loss at €13.1bn in 2022, followed by Germany at €11.8bn.
- The UK and its Overseas Territories and Crown Dependencies are linked to about €8bn, or 13.6% of the EU total.
- The OECD says most profit-shifting schemes are not illegal, although some are, and cost governments $100bn to $240bn a year.
Why it matters. According to the OECD, profit shifting undermines the fairness of tax systems and costs governments an estimated $100bn to $240bn a year.
The Tax Justice Network estimates EU countries lose €59.3bn a year in tax revenue as multinational companies shift profits across borders. France (€13.1bn) and Germany (€11.8bn) account for 42% of the total, based on 2022 figures. The network links about €8bn of the losses to the UK and its Overseas Territories and Crown Dependencies.
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EU Loses About €59.3bn a Year to Corporate Profit Shifting, Study Finds
EU countries lose an estimated €59.3bn a year in tax revenue as multinational companies shift profits across borders, according to the Tax Justice Network. The organisation links about €8bn of these losses to the UK and its Overseas Territories. The UK itself ranks among the countries that lose the most tax worldwide, the group said. Profit shifting moves taxable earnings to low-tax jurisdictions, reducing revenue for the countries where economic activity takes place. The estimate highlights the role of tax haven networks in cross-border tax losses.