Thursday

20th Feb 2020

LuxLeaks firm advising EU commission on tax

  • The Grand Duchy was the centre of an investigation by reporters into tax dodging deals (Photo: R/DV/RS)

A firm directly involved in one of Europe’s largest tax scandals is now giving tax advice to the European Commission and member states.

The audit firm, PricewaterhouseCoopers (PwC), sits in a group called the EU Joint Transfer Pricing Forum.

Read and decide

Join EUobserver today

Support quality EU news

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

... or join as a group

The forum’s been around for years, but its mandate was recently renewed, and it held its first new-model meeting last week at the Albert Borschette Congress Centre in Brussels.

Transfer pricing is a method used by multinationals to minimise taxes.

The forum contains 18 experts and 28 officials, one from each EU state.

Two of the experts come from civil society: Financial Transparency Coalition and Eurodad, Brussels-based NGOs.

But it’s chaired by Bruno Gibert, a lawyer at the Paris-based corporate law firm CMS Bureau Francis Lefebvre, which specialises in transfer pricing.

Apart from PwC, it includes audit firm Deloitte.

It also includes the head of global transfer pricing at German chemicals giant Bayer, Spanish energy giant Repsol, and car giant Volvo, among others.

Eurodad’s Tove Ryding told EUobserver that “it’s not a legislative organ, but they do define a lot of recommendations which can later translate to soft law and then into hard law”.

Gibert couldn’t be contacted for comment.

But his law firm’s website says the forum’s “initial aim was to develop a strategy to reduce compliance costs and remove tax obstacles hindering cross-border economic activity between EU countries”.

The forum has helped to elaborate transfer price rules, related management fees, and advanced pricing agreements (APAs).

The APAs were instrumental in letting hundreds of big companies based in Luxembourg pay next to no tax around the world thanks to confidential deals masterminded by PwC.

The LuxLeaks scandal erupted last November, when journalists published thousands of leaked PwC of documents showing that the deals, also known as tax rulings and comfort letters, saw multinationals pay less than 1 percent tax on profits.

But PwC remains largely unapologetic.

In May, its head of tax policy, Stef van Weeghel, told MEPs not to make a fuss about isolated cases.

“If we focus on a particular country and on a particular regime or ruling, it could indeed be that there is very little taxation in that country. But if we look at the overall effective tax rates of multinationals … we find that these are quite high”, he said.

Deloitte head of UK tax policy Bill Dodwell warned that high taxes get passed on to consumers.

The European Commission, for its part, is taking LuxLeaks more seriously.

It has political skin in the game because the commission president, Jean-Claude Juncker, was PM in Luxembourg when the tax rulings took place.

In one response, it launched a so-called Tax Transparency Package earlier this year.

Its anti-trust wing is also looking into potential tax abuse in other member states, but one case specifically involves Amazon and transfer pricing in Luxembourg

Koen Roovers, who sits on the forum on behalf of Financial Transparency Coalition, said it’s unclear to what extent it influences EU or OECD policy.

But he noted that its internal deliberations should spend more time on ethical questions.

“There is a widespread belief there that [tax and transfer pricing] is only a technical discussion, whereas I see it as political”, he told this website.

The forum will meet again in late October.

Exclusive

Balkan spies 'feed' EU's police database via Czechs

Western Balkan secret services have handed over more the 250 alerts on suspected foreign terrorist fighters since last summer - fed into the EU's police database by the Czech Republic, according to a confidential document seen by EUobserver.

New EU public prosecutor has four staff for 3,000 cases

Laura Kovesi who heads the new European Public Prosecutor's Office, tasked to tackle fraud linked to VAT, money laundering, and corruption across the EU, warned she is dangerously understaffed and underfunded.

Polish 'LGBTI-free zones' not ok, says EU commission

The European Commissioner for equality Helena Dalli has said the distribution of 'LGBTI-free zones' stickers or the adoption of anti-LGBTI resolutions cannot be allowed. Some 86 towns in Poland have so far declared themselves 'LGBTI-free zones'.

News in Brief

  1. EU unveils white paper on AI and data strategy
  2. Dutch court rules against Russia in €46bn Yukos case
  3. Britain to bar 'Polish plumber-type' migrants
  4. Greece seeks EU help to get back classical statues from UK
  5. HSBC to cut 35,000 jobs worldwide
  6. Regions chief appeals against cutting EU cohesion funds
  7. Verhofstadt criticises UK Brexit negotiator
  8. Turkish court acquits Gezi park activists

Polish 'LGBTI-free zones' not ok, says EU commission

The European Commissioner for equality Helena Dalli has said the distribution of 'LGBTI-free zones' stickers or the adoption of anti-LGBTI resolutions cannot be allowed. Some 86 towns in Poland have so far declared themselves 'LGBTI-free zones'.

Stakeholders' Highlights

  1. Nordic Council of MinistersScottish parliament seeks closer collaboration with the Nordic Council
  2. UNESDAFrom Linear to Circular – check out UNESDA's new blog
  3. Nordic Council of Ministers40 years of experience have proven its point: Sustainable financing actually works
  4. Nordic Council of MinistersNordic and Baltic ministers paving the way for 5G in the region
  5. Nordic Council of MinistersEarmarked paternity leave – an effective way to change norms
  6. Nordic Council of MinistersNordic Climate Action Weeks in December

Latest News

  1. EU leaders face major clash on rule of law budget link
  2. North Macedonia warns EU on 'dirtiest ever' election
  3. Western 'endarkenment' and the voodoo politics of Europe
  4. Warning of agricultural 'digital arms race' in EU
  5. Cayman Islands put on tax-haven blacklist after Brexit
  6. Boris' Brexit bluff? - UK will resist alignment to the end
  7. US still open to Kosovo-Serbia land swap
  8. EU countries enter final phase of budget talks

Join EUobserver

Support quality EU news

Join us