Friday

19th Apr 2019

MEP takes EU to court on tax transparency

  • Luxembourg was the centre of a major investigation into how tax authorities cut tax busting deals with multinationals (Photo: Jimmy Reu)

The European Commission is being taken to court for not handing over documents in a case that aims to shed light on wide-spread corporate tax evasion schemes by EU states.

The move is part of a larger transparency effort by euro-deputies in a committee with a mandate to probe tax rulings following the so-called LuxLeaks scandal.

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

The scandal, which erupted after a November 2014 investigation from the International Consortium of Investigative Journalists (ICIJ), found nearly 340 companies had managed to slash their global tax bills through dubious deals brokered between Luxembourg tax authorities and PwC, Ernst & Young, Deloitte and KPMG.

Most of those deals were brokered when EU Commission president Jean-Claude Juncker held top positions in Luxembourg.

Juncker, despite his many years as Luxembourg's prime minister and finance minister, insists he had no role in the matter.

MEPs in the committee, first launched last February, have since broadened their probe to the EU Commission and EU states with a new six-month lease.

Last April, the EP committee had requested the European Commission hand over documents and minutes from a so-called working group on business taxation in the Council, representing member states.

The group is made up of senior representatives for finance ministers.

Minutes of the meetings, prepared by the commission, outline the positions of member states on the tax rulings.

MEPs had their request denied.

EU economics commissioner Pierre Moscovici said the consent of member states was needed first, noting that almost half had refused to transmit the documents.

MEPs piled on the pressure with Moscovici then agreeing to limited access with some of the documents partly redacted and only accessible in a restricted reading room.

But Fabio de Masi, a German MEP from the United Left, said full access was needed.

On Wednesday (13 January), he filed a lawsuit against the commission with Europe's top court in Luxembourg.

In an emailed statement, he said the "commission can no longer hide behind excuses on tax secrecy when withholding vast amounts of political information from elected members of parliament".

He further noted full disclosure was needed to reveal the "systematic political backup for a tax avoidance cartel that costs taxpayers in the EU hundreds of billions of euros annually".

The European Commission, for its part, says it will review de Masi's complaint but is not yet aware if it has been filed with the court.

But earlier this week, Moscovici told MEPs at a hearing at the European Parliament that corporate tax reforms and fiscal transparency were a priority for 2016.

"We have a serious problem with tax avoidance and lack of transparency. Too many people have looked the other way", he said.

Among his plans is an anti-tax avoidance package to be presented before the end of the month.

The package involves cracking down on aggressive corporate tax planning, also known as "base erosion and profit shifting" or BEPs.

“We will start with the anti-BEPS directive at the end of January, as for that we have already agreement at the level of the G20 and OECD”.

This article was updated at 10.00 on 14 January to include a response from the European Commission.

Member states stonewall EP tax probe

EU member states are refusing to hand over documents to help the European Parliament's probe into tax abuse by multi-national corporations.

EU may impose full tax transparency on US firms

Big US firms like Google and Amazon could be forced to reveal their earnings and tax rates to the wider public as the European Commission mulls a new proposal set for April.

Feature

Romania enlists priests to promote euro switchover plan

Romania is due to join the single currency in 2024 - despite currently only meeting one of the four criteria. Now the government in Bucharest is enlisting an unlikely ally to promote the euro to the public: the clergy.

Trump and Kurz: not best friends, after all

The visit of Austrian chancellor Sebastian Kurz to the White House on Wednesday showed that the current rift in transatlantic relations is deepening by the day.

Stakeholders' Highlights

  1. Counter BalanceSign the petition to help reform the EU’s Bank
  2. UNICEFChild rights organisations encourage candidates for EU elections to become Child Rights Champions
  3. UNESDAUNESDA Outlines 2019-2024 Aspirations: Sustainability, Responsibility, Competitiveness
  4. Counter BalanceRecord citizens’ input to EU bank’s consultation calls on EIB to abandon fossil fuels
  5. International Partnership for Human RightsAnnual EU-Turkmenistan Human Rights Dialogue takes place in Ashgabat
  6. Nordic Council of MinistersNew campaign: spot, capture and share Traces of North
  7. Nordic Council of MinistersLeading Nordic candidates go head-to-head in EU election debate
  8. Nordic Council of MinistersNew Secretary General: Nordic co-operation must benefit everybody
  9. Platform for Peace and JusticeMEP Kati Piri: “Our red line on Turkey has been crossed”
  10. UNICEF2018 deadliest year yet for children in Syria as war enters 9th year
  11. Nordic Council of MinistersNordic commitment to driving global gender equality
  12. International Partnership for Human RightsMeet your defender: Rasul Jafarov leading human rights defender from Azerbaijan

Latest News

  1. Romania drafts EU code on NGO migrant rescues
  2. Bulgaria, Hungary, and Malta shamed on press unfreedom
  3. EU drafts $20bn US sanctions list in aviation dispute
  4. Brunei defends stoning to death of gay men in EU letter
  5. US Democrats side with Ireland on Brexit
  6. Wifi or 5G to connect EU cars? MEPs weigh in
  7. How Brexit may harm the new EU parliament
  8. EU parliament backs whistleblower law

Join EUobserver

Support quality EU news

Join us