Almost all Spanish stock market firms use tax havens, report finds; Between them, 33 of the 35 companies listed on Spain’s IBEX exchange had 449 subsidiaries in 17 tax havens in 2012

Almost all Spanish stock market firms use tax havens, report finds

Between them, 33 of the 35 companies listed on Spain’s IBEX exchange had 449 subsidiaries in 17 tax havens in 2012

Stephen Burgen in Barcelona, Friday 30 May 2014 13.34 BST

Almost all of the 35 companies listed on the Spanish stock exchange use tax havens, according to a report from Observatorio RSC, an organisation that monitors corporate social responsibility.

The figures, based on company reports for 2012, show a 31.9% increase in the use of tax havens compared with 2010, with 33 firms (94%) using them. The favourite haven is the US state of Delaware, followed by the Netherlands, Luxembourg and Ireland. In total, the 33 companies have 449 subsidiaries in 17 tax havens.

The report’s authors claim that no advance was made regarding fiscal responsibility in 2012. They argue that commitments to corporate social responsibility (CSR), good governance and fiscal responsibility made in the annual reports of Spain‘s top 35 companies have little substance.

“There is no evidence that investment decisions are made with any thought of their impact beyond the purely financial. The reports usually have a positive and narrative focus without any process of accountability or way of measuring to what extent they are achieving stated objectives,” Orencio Vázquez, the study’s co-ordinator said.

The report points to an overall lack of transparency and says that “either companies are omitting financial data in a premeditated manner or are not analysing it correctly from a CSR point of view”.

It concludes that “there continues to be a gap between commitment and action”. It says only five companies are expressly committed to protecting workers’ rights in countries where the international norms of freedom of association and free collective bargaining do not apply, and only two have a commitment to developing these rights. It also says that the annual reports generally cover up or gloss over the risks associated with their activities, and that risk assessment in regard to the environment is “practically non-existent”.

Tax evasion is a major problem in Spain. A report published by the tax office this year estimated that the “submerged” economy accounts for a quarter of the nation’s GDP. While there have been recent high-profile court cases, such as the footballer Lionel Messi and the soprano Montserrat Caballé, tax inspectors say the bulk of the evasion is carried out by business and families with large fortunes. The tax authorities complain that their time is wasted pursuing small fry while the big fish remain out of reach.


About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (, the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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