Global shipping: mega profits, micro taxes

Background

Since the pandemic, leading shipping companies’ profits have reached extraordinary scale. The world’s 10 biggest public shipping companies have topped all-time high profits of $300bn in five years – but pay less than half the average tax rate. 

The world’s 139 largest shipping companies – accounting for 90% of the world’s fleet – made almost $340bn USD in profits from 2019-2023. Of this huge sum, 93% was grabbed by the top 10 largest companies. Yet, despite these record earnings, their taxes have remained catastrophically low.

Globally, shipping constitutes 3% of annual greenhouse gas (GHG) emissions. The International Maritime Organization, the UN agency that regulates shipping, is currently debating measures to curb shipping’s climate impact. A levy on the use of fossil fuels within the industry is one of the measures being considered. 

Our report illustrates the scale of the profits the industry has made from 2019-2023 and the small amount of tax paid on those profits. It shows that a global levy on the industry could assist in contributing to a just and equitable transition as shipping’s climate impacts are tackled. 

The scale of the problem

• The international shipping sector produces 1bn tonnes of GHG emissions each year, causing climate impacts that are most acutely felt in the Global South. 
• Nine of the 10 most profitable companies are from high-income developed economies. Four of these are headquartered in wealthy Organisation for Economic Co-operation and Development (OECD) states. 
• Over 2019-2023, members of the OECD have an average tax rate on shipping companies of 4.3%, compared to a rest of the world average of 16%.
• By contrast, a single Chinese company, Cosco Shipping Line, paid 46% of all shipping taxes that had been paid by global shipping companies from 2019-2023, with an actual tax rate of 22%. 

What’s covered in the report?

Our latest report – Global shipping: mega profits, micro taxes shows that: 

• The 10 largest companies paid only $30bn in tax from 2019-2023, creating an effective tax rate of just 9.7%. This is far below the global corporation tax average rate of 21.5%, and below the new OECD global minimum tax rate of 15% (from which shipping is exempt).
• More than $38bn extra in taxes could have been raised from the biggest four OECD companies alone – Maersk, CMA CGM, Hapag-Lloyd and ONE.
• The same four companies made over half of all profits globally ($174bn) and paid only $5.3bn in taxes, a tax rate of just 3.1%.

Shipping companies must start paying their fair share of taxes to align with the impact their operations have on our planet. 

Read the report in full.