Tuesday

25th Jul 2017

Germany accused of strangling EU tax transparency

  • PwC was at the centre of the LuxLeaks scandal (Photo: Sven Graeme)

A German-led group of EU states is trying to strangle plans for greater tax transparency, amid the restart of an iconic whistleblower case.

Germany was accused of leading the behind-the-scenes attack on a European Commission proposal to raise transparency standards by German Green MEP Sven Giegold at a press conference in Luxembourg on Monday (12 December).

Thank you for reading EUobserver!

Subscribe now and get 40% off for an annual subscription. Sale ends soon.

  1. €90 per year. Use discount code EUOBS40%
  2. or €15 per month
  3. Cancel anytime

EUobserver is an independent, not-for-profit news organization that publishes daily news reports, analysis, and investigations from Brussels and the EU member states. We are an indispensable news source for anyone who wants to know what is going on in the EU.

We are mainly funded by advertising and subscription revenues. As advertising revenues are falling fast, we depend on subscription revenues to support our journalism.

For group, corporate or student subscriptions, please contact us. See also our full Terms of Use.

If you already have an account click here to login.

"I have to say that the Commission has moved forward with strong proposals in order to bring more tax justice into the European Union but these proposals are now stuck in the mud of member states," he said.

The Commission had proposed that big companies should publish details of their profits and taxes in a model known as country-by-country reporting.

It was due to be adopted by a majority vote.

But Germany, joined by Luxembourg, wants to change the legal basis, so that it would be adopted by unanimity, creating the opportunity for a veto, Giegold said.

Germany has one of the world's most secretive financial jurisdictions, according to research by Tax Justice Network, a UK-based advocacy group.

Austria, the Czech Republic, Denmark, Latvia, Slovenia, and Sweden are also on Germany’s side, according to a report by Eurodad, an NGO in Brussels.

Giegold spoke in Luxembourg ahead of the trial of two tax evasion whistleblowers - Antoine Deltour, Raphael Halet, and journalist Edouard Perrin.

Deltour and Halet, who are former employees of PricewaterhouseCoopers (PwC), a leading accountancy firm, gave 30,000 confidential files to Perrin, a French investigative journalist, showing that Luxembourg colluded with big firms to dodge billions in tax liabilities.

The so-called LuxLeaks revelations triggered a public backlash and EU pledges on reform two years ago.

The Grand Duchy gave Deltour and Halet suspended sentences and fines for their actions, however, with a verdict on their appeal expected by 21 December.

Perrin is also caught up in an appeal.

German breakfast

Finance ministers, before their official meeting in Brussels last week, discussed the Commission proposal at an informal breakfast, according to an EU source.

Giegold said in Luxembourg on Monday that Germany’s finance minister, Wolfgnag Schaueble, played a prominent role in the insurgency.

The Green MEP also took a stab at Dutch finance minister Jeroen Dijsselbloem, who chairs meetings of eurozone finance ministers.

"Last Tuesday, he [Dijsselbloem] stopped the compromise on hybrid mismatches, which allows billions to be transferred tax-free in profits and demands, in the interest of companies, which are located in Netherlands," said Giegold.

He said the Netherlands has not made any effort to change its patent box laws, used by corporations to withhold tax money from national budgets.

Patent boxes are used for tax exemptions on activities related to research and innovation.

The Netherlands was ranked as one of the world's worst tax havens in a recent report by aid agency Oxfam.

Popularity crisis

Tax issues are part of the EU’s current popularity crisis, with Jean-Claude Juncker, the European Commission president and former Luxembourg prime minister, personally implicated in the Grand Duchy’s dealings.

Fabio De Masi, a German MEP from the far-left United Left group, said on Wednesday that nothing was being done to restore public trust in this area, however.

"The number of dubious tax rulings has actually increased dramatically since LuxLeaks. This shows how urgently we need more decisive action against tax dumping in the EU,” he said.

He said that Halet, Deltour and Perrin had “clearly acted in the public interest” and should be exonerated.

EU to toughen corporate tax disclosures

EU financial services Commissioner Jonathan Hill is set to present a bill to make it more difficult for big firms to hide their assets from tax authorities.

Opinion

Germany is not the world's liberal lighthouse

Germany should not harbouring illusions of exceptionalism, but should craft its politics with foresight and in close contact with its European partners.

EU Commission unmoved by Polish president's veto

Andrzej Duda decided to veto two of the controversial draft laws, which would put the judiciary under political control, but the EU executive is awaiting details before deciding on whether to launch legal probes on Wednesday.

Column / Brexit Briefing

UK presses the Brexit pause button

Originally, a transitional deal to soften the UK's exit from the EU was seen as a no-go on the British side, but now it is seeming more and more likely.

News in Brief

  1. Wallonia's Magnette leaves national politics
  2. Polish president vetoes justice reforms
  3. Turkey arrests protesters, as journalists go to trial
  4. Poll: Only 24% of Germans want 'strong leader'
  5. US envoy: 'hot war' not frozen conflict in Ukraine
  6. BMW denies Dieselgate cartel allegations
  7. Polish parliament adopts controversial justice reform
  8. GMO opt-out plan unlikely to go anywhere in 2017

Stakeholders' Highlights

  1. European Jewish CongressJean-Marie Le Pen Faces Trial for Oven Comments About Jewish Singer
  2. ACCAAnnounces Belt & Road Research at Shanghai Conference
  3. ECPAFood waste in the field can double without crop protection. #WithOrWithout #pesticides
  4. EU2017EEEstonia Allocates €1 Million to Alleviate Migratory Pressure From Libya in Italy
  5. Dialogue PlatformFethullah Gulen's Message on the Anniversary of the Coup Attempt in Turkey
  6. Martens CentreWeeding out Fake News: An Approach to Social Media Regulation
  7. European Jewish CongressEJC Concerned by Normalisation of Antisemitic Tropes in Hungary
  8. Counter BalanceOut for Summer Episode 1: How the EIB Sweeps a Development Fiasco Under the Rug
  9. CESICESI to Participate in Sectoral Social Dialogue Committee on Postal Services
  10. ILGA-EuropeMalta Keeps on Rocking: Marriage Equality on Its Way
  11. European Friends of ArmeniaEuFoA Director and MEPs Comment on the Recent Conflict Escalation in Nagorno-Karabakh
  12. EU2017EEEstonian Presidency Kicks off Youth Programme With Coding Summer School