Thursday

1st Jun 2023

Charity attacks EU "hypocrisy" on tax evasion

  • Tax takes centre stage at Wednesday's EU summit (Photo: European Council)

EU leaders have been put on the defensive after development charity Oxfam accused them of turning a blind eye to €9.5 trillion hidden in European tax havens.

Oxfam, which lambasted what it described as EU "hypocrisy" and "hot air," launched its report as leaders gather in Brussels on Wednesday (22 May) for talks aimed at cracking down on tax evasion and avoidance.

Read and decide

Join EUobserver today

Become an expert on Europe

Get instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

According to Oxfam's estimates, based on data gathered from the Swiss-based Bank of International Settlements and the International Monetary Fund, at least €14 trillion is hidden by wealthy individuals in tax havens around the world, of which around €9.5 trillion is kept in Europe or Europe-linked protectorates.

The organisation claims that this costs EU governments €120 billion a year in lost tax revenues.

In a statement, Natalia Alonso, the head of Oxfam’s EU Office, said that there was "enough potential tax to be had on hidden 'private' money to end extreme poverty twice over."

She added that "unless the EU agrees a public tax havens blacklist and clear countermeasures, we won’t get much more than hot air from leaders."

In a blow to UK Prime Minister David Cameron, who has recently talked tough on tax evasion, Oxfam singled out the UK and its overseas dependencies as the biggest culprit, accounting for over €40 billion of the lost tax revenue.

Earlier this week, Cameron sent an open letter to 10 UK-linked tax havens, which include islands in the Caribbean and in the Channel, urging them to disclose information on bank accounts used for company ownership.

The UK leader also plans to put the issue on top of the agenda at the next meeting of the G8 in June.

"We need to know who really owns and controls each and every company," he wrote, adding that the 10 territories should provide "full and accurate details on the true ownership and control of every company."

For once, the eurozone crisis will not take centre stage at the summit.

The talks start with a "working lunch" and are expected to finish by 6pm Brussels time in what would amount to one of the shortest top-level meetings in recent years.

Tax and energy policy are the main items on the agenda.

But talks about a future EU banking union and the long-term welfare of the eurozone are expected to take place on the margins.

The meeting is the first of a series of themed summits focusing on EU competitiveness planned by European Council President Herman van Rompuy.

Although tax policy is rarely discussed at EU level, tax evasion and bank secrecy have become politically charged in recent months following scandals in France and Greece over the use of secret bank accounts by politicians.

One EU official told this website that leaders would try to make progress on information exchange and banking secrecy before having a more general discussion on corporate taxation.

The tiny amount of tax paid by business giants has also sparked controversy.

On Tuesday, the Irish government denied that it gave a preferential tax deal to US software giant Apple after a US senate report indicated that it paid minimal tax on tens of billions of dollars in profits kept in Irish holding companies.

In concrete terms, leaders are hoping to break a deadlock on the so-called Savings Tax directive, which would allow governments to collect information on income from foreign accounts held by their residents.

Although the bill is near completion, Austria and Luxembourg are yet to give the green light, after saying they would not sign off without British action on its own tax havens.

EU officials were sanguine about the prospects of clinching a deal, with one commenting that "there is no disagreement on the scope of the directive."

Another contact said the summit would not be used to simply "pressurise Austria and Luxembourg," but added that both countries had already "implied that they will abide by EU rules on info exchange within the EU."

Meanwhile, Irish officials are hoping the talks will move forward EU legislation to combat VAT fraud with a view to agreement before the end of their six month presidency in June.

On energy, talks are likely to focus on how governments can lower prices to support industrial activity in Europe.

This could involve government measures to support renewable energies, but also to back traditional energy sources by making changes to state aid rules.

An EU official said the energy talks would take place through the lens of prices rather than environmental and climate change concerns.

Opinion

Tax wars: EU playing catch-up with US

The EU has promised to create the world's leading tax transparency regime. But it is playing catch-up with Fatca, the equivalent US legislation.

Column

What a Spanish novelist can teach us about communality

In a world where cultural clashes and sectarianism seems to be on the increase, Spanish novelist Javier Cercas (b.1962) takes the opposite approach. He cherishes both life in the big city and in the countryside.

Opinion

Poland and Hungary's ugly divorce over Ukraine

What started in 2015 as a 'friends-with-benefits' relationship between Viktor Orbán and Jarosław Kaczyński, for Hungary and Poland, is ending in disgust and enmity — which will not be overcome until both leaders leave.

Latest News

  1. EU data protection chief launches Frontex investigation
  2. Madrid steps up bid to host EU anti-money laundering hub
  3. How EU leaders should deal with Chinese government repression
  4. MEPs pile on pressure for EU to delay Hungary's presidency
  5. IEA: World 'comfortably' on track for renewables target
  6. Europe's TV union wooing Lavrov for splashy interview
  7. ECB: eurozone home prices could see 'disorderly' fall
  8. Adapting to Southern Europe's 'new normal' — from droughts to floods

Stakeholders' Highlights

  1. International Sustainable Finance CentreJoin CEE Sustainable Finance Summit, 15 – 19 May 2023, high-level event for finance & business
  2. ICLEISeven actionable measures to make food procurement in Europe more sustainable
  3. World BankWorld Bank Report Highlights Role of Human Development for a Successful Green Transition in Europe
  4. Nordic Council of MinistersNordic summit to step up the fight against food loss and waste
  5. Nordic Council of MinistersThink-tank: Strengthen co-operation around tech giants’ influence in the Nordics
  6. EFBWWEFBWW calls for the EC to stop exploitation in subcontracting chains

Stakeholders' Highlights

  1. InformaConnecting Expert Industry-Leaders, Top Suppliers, and Inquiring Buyers all in one space - visit Battery Show Europe.
  2. EFBWWEFBWW and FIEC do not agree to any exemptions to mandatory prior notifications in construction
  3. Nordic Council of MinistersNordic and Baltic ways to prevent gender-based violence
  4. Nordic Council of MinistersCSW67: Economic gender equality now! Nordic ways to close the pension gap
  5. Nordic Council of MinistersCSW67: Pushing back the push-back - Nordic solutions to online gender-based violence
  6. Nordic Council of MinistersCSW67: The Nordics are ready to push for gender equality

Join EUobserver

Support quality EU news

Join us