Tuesday

6th Jun 2023

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

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

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.

ECB: eurozone home prices could see 'disorderly' fall

The European Central Bank in its Financial Stability Review warned EU home prices could see a 'disorderly' fall as high mortgage rates are making houses unaffordable for households and unattractive for investors.

Analysis

Final steps for EU's due diligence on supply chains law

Final negotiations on the EU due diligence law begin this week. But will this law make companies embed due diligence requirements in their internal processes or incentive them to outsource their obligations to third parties?

Latest News

  1. No clear 'Qatargate effect' — but only half voters aware of EU election
  2. Part of EU middle class 'being squeezed out', MEP warns
  3. Migration commissioner: Greek pushback film 'clear deportation'
  4. In 2024, Europe's voters need to pick a better crop of MEPs
  5. ECB president grilled over €135bn interest payout to commercial banks
  6. EU political ads rules could be 'hotbed for retaliatory flagging'
  7. Final steps for EU's due diligence on supply chains law
  8. Top EU court rules Poland's court reforms 'infringe law'

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