12th Apr 2024

France, Germany call for tax avoidance clampdown

  • The French, German and Italian finance ministers want new EU rules on corporate tax (Photo: EUobserver)

The finance ministers of Germany, France and Italy have called on the EU to propose new law to curb corporate tax avoidance,

In a joint letter to the EU's economics commissioner Pierre Moscovici on Monday (1 December), Germany's Wolfgang Schaeuble, France's Michel Sapin and Pier-Carlo Padoan from Italy said that a new EU directive on anti-base erosion and profit-sharing could be presented before the end of 2014.

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"This strong initiative taken by the EU ... would give Europe the leading place it deserves at the international level," the ministers argue.

They added that the new rules could be agreed by ministers by the end of 2025. Under the EU treaties, all legislation dealing with tax requires the unanimous support of all 28 governments.

The letter is not the first time that the eurozone's three largest countries have presented a united front on tax.

They are also among the eleven countries who have promised to introduce a tax on financial transactions, although no agreement will be reached until 2015.

Meanwhile, France and Germany have repeatedly called for Ireland, which is currently facing an EU probe into so-called 'sweetheart' tax deals with Apple, to increase its corporate tax rate.

Such tax deals, which are also under investigation in Luxembourg and the Netherlands, and Europe's fragile economy have pushed corporate tax avoidance up the political agenda.

In the letter, the ministers commented that "the limits of permissible tax competition between member states have shifted. That development is irreversible".

The EU executive estimates that tax avoidance and evasion in the EU cost about €1 trillion each year.

The commission tabled plans for a common corporate tax base across the EU in 2011, only to see them halted by a group of governments including Luxembourg, Ireland and Malta.

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