EU Council fails to reform secretive tax working group

Title photo © barnyz

We have just blogged about the failure of the Council’s Code of Conduct Group on business taxation to adequately tackle the issue of tax havens via a blacklist that would impose sufficiently dissuasive sanctions against non-cooperative jurisdictions outside the EU.

The topic was also on the European Parliament’s plenary agenda at the March 2017 Strasbourg session. Up for debate was the follow-up by the European Commission and the Council of the European Union member state governments to the recommendations by the European Parliament’s LuxLeaks special committees TAXE and TAX2.

Our GUE/NGL group had managed to significantly shape the final report of those special committees with a range of progressive recommendations for more tax transparency and tax justice in the EU. But given the very limited competencies of the European Parliament in the field of tax policy, initiatives for implementing those recommendations crucially hinge on the political will of the European Commission and the Council of the EU member state governments.

For MEP Fabio De Masi, vice chair of the on-going Panama Papers Committee of Inquiry – the status quo must change:

“Since LuxLeaks, the EU has promised to fight corporate tax dumping. Yet, we are still losing hundreds of billions of euros a year to Disney, McDonalds and others whilst the EU is falling apart.”

“The Code of Conduct group has been responsible for combating harmful tax competition for 20 years. But that has been a failure with very little to show for.”

“If we keep giving EU tax havens veto powers, we will never make progress with either establishing a blacklist for tax havens or a sufficiently progressive Common Consolidated Corporate Tax Base for Europe,” said De Masi.

Irish MEP and member of the Panama Papers inquiry committee Matt Carthy criticised EU member states that continue to veto reforms for fair and transparent corporate taxation.

“It’s very disappointing to see a pattern where some Member States, including Ireland, play an obstructionist role in the Code of Conduct group on business taxation and the Council in consistently opposing reforms for fair and transparent corporate taxation,” he said.

“Irish Finance Minister Michael Noonan claims that Ireland is committed to the highest international standards on tax transparency. But at the same time, he’s also on the record as opposing the EU proposal to introduce public country-by-country reporting (CBCR).

“I have heard both government and tax industry representatives claim this is a matter of trust – the Irish people have trust in our Revenue agency, so making the reporting public is unnecessary. Well, many of us don’t trust Revenue – this is the agency that gave illegal sweetheart deals to Apple, after all.

“When country-by-country reporting for large banks was made public, it wasn’t any government agency that pointed out to us that French banks were making profits in Ireland up to 76 times higher than in France – it was Oxfam.

“Making country-by-country reporting public is vital to ensure democratic, public scrutiny of the tax affairs of the largest multinationals.”