One of the largest shareholders in residential real estate pays effective tax rate of 12-18% thanks to aggressive tax planning in Netherlands, Luxembourg and Ireland.
In a new report “Inside BlackRock” commissioned by co-chair of The Left in the European Parliament, Martin Schirdewan (Die Linke, Germany), the tax avoidance of the world’s largest asset manager Blackrock is put under the microscope, demonstrating that in the period 2017 – 2023 the corporation paid an effective tax rate 12-18%, about half that of ordinary companies.
Through an extensive network of subsidiaries, Blackrock employs sophisticated tax planning strategies, including transfer pricing for intellectual property, profit shifting through intra-group transactions, and utilisation of subsidiaries in tax havens.
Conservative estimates indicate that the efforts of Blackrock, which holds significant portfolios in residential property, arms manufacturing, tech and fossil fuel corporations, have resulted in a loss in tax revenue of up to €378m to Germany, €118m in France, and €62.5m in Italy. For the entire EU combined the loss in tax revenue reaches up to €1 billion.
Left co-President Martin Schirdwan said (Die Linke, Germany): “BlackRock systematically exploits loopholes in tax law to avoid paying millions of euros in taxes in Germany. By shifting profits to the Netherlands — a tax haven for multinational corporations — BlackRock shirks its social responsibility. Yet it benefits from our workers, markets, and infrastructure. This behavior is a slap in the face to all the people who work hard every day and pay their fair share of taxes. Economic power inevitably leads to political influence. The risks this poses to our society and democracy must finally be discussed openly and critically. It is high time for a public debate on the glaring inequality in distribution and unfair taxation, and for political action.”
The report is compiled by macroeconomist Ceyhun Elgin, Professor of Economics at Boğaziçi University in Istanbul.
