Sunday

23rd Sep 2018

France threatens Switzerland on tax evasion

  • Sarkozy in Cannes. Liechtenstein and Switzerland are the only countries on the OECD list which play a significant role in tax scams (Photo: diplomatie.gouv.fr)

French leader Nicolas Sarkozy has promised to make Switzerland into an international pariah unless it stops helping EU tax payers hide money. But EU countries have a poor track record of cracking down on high-level cheats.

The president told press after a G20 summit in Cannes on Friday (4 November): "We do not want any more tax havens. The message is very clear, countries which persist in being tax havens will be ostracized by the international community."

Read and decide

Join EUobserver today

Support quality EU news

Get instant access to all articles — and 18 year's of archives. 30 days free trial.

... or join as a group

He named and shamed Liechtenstein and Switzerland as being on an OECD list of 11 countries which do the least on tax co-operation.

The OECD, a Paris-based club of wealthy nations, earlier on Wednesday gave the full roll-call. The other nine are: Antigua and Barbuda, Barbados, Brunei, Botswana, Panama, Seychelles, Trinidad and Tobago, Uruguay and Vanuatu.

The Cannes summit saw G20 countries which had not already done so sign up to an OECD convention on cleaning up the sector. Its joint communique also threatened "countermeasures" against the 11 if they do not mend their ways.

OECD official Jeffrey Owens told EUobserver the G20 is making "significant progress." He said its initiatives have in recent years led to recovery of €14 billion in extra tax revenue.

One anti-tax-evasion NGO hailed Sarkozy's tough rhetoric.

"It may be a welcome step for the EU if France is prepared to use its political muscle against Switzerland," Markus Meinzer, from the Berlin office of the Tax Justice Network said.

He explained that EU finance ministers are currently negotiating a robust new law on tax evasion, the so-called revised Savings Taxation Directive. But Austria, Luxembourg and Italy are threatening to block the bill unless it covers Switzerland and UK overseas territories like the British Virgin Islands (BVI).

For his part, Nick Shaxson, the author of Treasure Islands, a book on how tax havens precipitated the financial crisis, said OECD-type lists do more harm than good.

"It's always been a mystery why some jurisdictions make the lists and others don't. In some ways, they are worse than useless because countries can point to them and say: 'Look at us. We're clean. We're not on the list," he told this website.

Shaxson noted the BVI is not on the list even though "vast numbers of corrupt, sleazy structures are run through the BVI."

G20 member the UK is also not included despite being one of the last countries in the world to tolerate "bearer shares" - a legal trick to hide the real owner of a company by saying that whoever holds the physical share documents in his hands at any given time is responsible.

Shaxson added that Greece is currently in talks with Switzerland on a tax repatriation deal on the model of a UK-Swiss deal signed this year.

Rich Greeks have reportedly stashed €200 billion in Switzerland. But Shaxson said that if the Greek deal contains the same loopholes as the British one, "the Greeks will be lucky if they get any more than €300 million out of it" in unpaid tax.

EU tax-scam body stuffed with tax avoidance experts

The European Commission has stuffed an advisory group on 'transfer pricing' - one of the biggest tax scandals of recent years, robbing countries of billions of euros a year in lost revenues - with multinationals that engage in the practice and the four biggest accounting firms in the world, who advise these firms on how best to do so.

EU commission to target growth with new laws in 2012

The European Commission's to-do list for 2012 is dominated by measures to restore economic growth. But the current dispute over a proposed financial transaction tax shows that EU countries might not play ball.

Airbnb agrees to clarify pricing for EU

The justice commissioner says the accommodation-rental website will better inform users about prices, and about the legal status of their 'hosts'. Facebook, however, could face sanctions if it doesn't comply with EU rules.

Stakeholders' Highlights

  1. NORDIC COUNCIL OF MINISTERSThe vital bioeconomy. New issue of “Sustainable Growth the Nordic Way” out now
  2. NORDIC COUNCIL OF MINISTERSThe Nordic gender effect goes international
  3. NORDIC COUNCIL OF MINISTERSPaula Lehtomaki from Finland elected as the Council's first female Secretary General
  4. NORDIC COUNCIL OF MINISTERSNordic design sets the stage at COP24, running a competition for sustainable chairs.
  5. Counter BalanceIn Kenya, a motorway funded by the European Investment Bank runs over roadside dwellers
  6. ACCACompany Law Package: Making the Best of Digital and Cross Border Mobility,
  7. IPHRCivil Society Worried About Shortcomings in EU-Kyrgyzstan Human Rights Dialogue
  8. UNESDAThe European Soft Drinks Industry Supports over 1.7 Million Jobs
  9. Mission of China to the EUJointly Building Belt and Road Initiative Leads to a Better Future for All
  10. IPHRCivil society asks PACE to appoint Rapporteur to probe issue of political prisoners in Azerbaijan
  11. ACCASocial Mobility – How Can We Increase Opportunities Through Training and Education?
  12. Nordic Council of MinistersEnergy Solutions for a Greener Tomorrow

Latest News

  1. Brexit and MEPs expenses in the spotlight This WEEK
  2. Wake-up call on European Day Against Islamophobia
  3. Sound of discord at 'Sound of Music' Salzburg summit
  4. Salzburg summit presses for bigger Frontex mandate
  5. UK's post-Brexit plan 'will not work', EU says
  6. Airbnb agrees to clarify pricing for EU
  7. Libya keeps coast guards rejected by the EU
  8. EU divisions on menu at Salzburg dinner

Join EUobserver

Support quality EU news

Join us