German chemicals firm BASF avoided nearly €1bn in tax, says report

German chemicals manufacturer BASF has been accused of avoiding close to €1 billion of tax.

In a report published on Monday, the company is alleged to have used aggressive tax-planning strategies in the Netherlands, Belgium, Switzerland and Malta to reduce its tax burden.

“BASF has been an increasingly outspoken critic of proposals to reform the international tax system,” the report by the European Green Movement and the European Free Alliance – which between them have seven members of the European Parliament – says, adding that the German industrial giant has opposed public country-by-country reporting, the mandatory disclosure of secret tax rulings and tighter rules on profit-shifting via intellectual property.

BASF is the largest chemicals company in the world, the report notes, with annual sales of €70.4 billion and 112,000 employees in more than 80 countries working for in excess of 570 different businesses.

Over five years between 2010 and 2014, BASF is alleged to have used a variety of tax breaks to save €923 million in tax.

Minimum tax rate

The report calls for a common consolidated corporate tax base and a minimum corporate income tax rate – both of which are opposed by Ireland – and mandatory country-by-country reporting of key financial data.

"Without these changes, the multinationals and their tax consultants, together with states which choose to engage in destructive tax competition, will continue to get around efforts to clamp down on profit-shifting and tax avoidance," writes author Marc Auerbach.

He said the report was not designed to “shame” BASF but to “illustrate the mismatches and gaps in European and national tax laws which practically guarantee that multinationals will adopt aggressive tax-avoidance strategies”.