FRESENIUS Failing to care: Global tax dodging by a German healthcare multinational

Fresenius, through its various divisions, is ranked in the top 260 global corporations. Fresenius Medical Care is the world’s largest dialysis company. With Helios in Germany and Quironsalud in Spain, Fresenius is Europe’s largest private hospital operator. Vamed, based in Austria, is a global hospital developer and operator. Fresenius Kabi is a producer and worldwide supplier of pharmaceuticals and medical equipment.

Fresenius is represented in almost every well-known tax haven around the world, including the Cayman Islands and the British Virgin Islands, Hong Kong, Delaware, Singapore and Panama. The company uses this network of tax havens to shift profits and avoid higher corporate taxes in Germany and other countries. Intra-group loans are a popular instrument: In 2017, for example, the two Irish Fresenius subsidiaries made a profit of 47 million euros just by granting loans to group companies in Spain and the United States – without any employees.

“This case study demonstrates that profit shifting and transfer pricing are not just the domain of US tech giants, but pervasively used by most multinationals, including large German multinationals like Fresenius,” says Gabriel Zucman, Professor of Economics at the University of Berkeley and member of the Independent Commission on the Reform of International Corporate Taxation (ICRICT). And Germany in particular is among those who are suffering: “My research shows that Germany may lose more than any other EU country from transfer pricing to European tax havens. The German government must get behind proposed reforms for unitary taxation and greater transparency. Fresenius, as a company which relies on government spending for public healthcare, must abandon tax haven structures and play a leadership role in promoting a fairer and more transparent global tax system. Companies, no matter their size, must compete on a level playing field and governments need the revenue to fund public services, like healthcare.”

Rosa Pavanelli, General Secretary of Public Services International (PSI), called on governments to shut down tax loopholes and change the outdated global tax system so that essential public services, like health care, are adequately funded. “Fresenius needs to clean up its act”, she said. “I am not surprised that this company is engaged in aggressive tax avoidance given the violation of workers’ rights outside of Germany and the global pattern of corruption. The problem is that they have been getting away with it. Governments must make sure they don’t fund tax dodgers.”

See here the report in English and German versions.

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