UK-linked jurisdictions account for €8 billion in EU tax losses, study estimates
France and Germany face the largest estimated losses tied to the UK network, according to the Tax Justice Network’s analysis of 2022 figures.
Corporate profit shifting costs EU countries an estimated €59.3 billion annually, with about €8 billion linked to the UK, its Crown Dependencies and Overseas Territories, the Tax Justice Network said. The UK-linked share represents 13.6 per cent of the EU total.
The organisation issued the findings alongside its Corporate Tax Haven Index update on 5 November. Its country estimates concern multinational companies, not individuals, and use figures from 2022, the latest available year. Profit shifting involves booking earnings in lower-tax jurisdictions instead of the places where business activity occurs, including through interest or royalty payments within corporate groups.
France’s estimated overall loss was €13.1 billion, while Germany’s was €11.8 billion. Together, their losses amounted to €24.9 billion, or 42 per cent of the EU total. Spain, Poland and Belgium each had estimated losses exceeding €4 billion.
Of France’s losses, €2.8 billion was linked to the UK network, equivalent to 21.3 per cent — the highest proportion among EU countries. Germany’s corresponding loss was €1.4 billion, or 11.9 per cent. The organisation said this was its first estimate of individual EU countries’ losses associated with that network.
The index assesses how jurisdictions’ tax rules and financial activity enable companies to reduce taxes elsewhere. It places the British Virgin Islands first, the Cayman Islands second and Bermuda third. Crown Dependencies determine their own tax policies, while Overseas Territories generally do so locally; the UK retains intervention powers in the territories.
