Tuesday

18th Sep 2018

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).

Read and decide

Join EUobserver today

Support quality EU news

Get instant access to all articles — and 18 year's of archives. 30 days free trial.

... or join as a group

"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.

MEPs dispute details of corporate transparency bill

Companies operating in the EU will be required to report about their activities all over the world, country by country, but will be able to "omit" "commercially sensitive" information.

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 promotes 'Egypt model' to reduce migrant numbers

EU council president Donald Tusk wants to discuss deepening relations with authoritarian Egypt, as a model of migrant reduction, with EU heads of state and government at a meeting in Salzburg, Austria on Wednesday.

News in Brief

  1. EU investigating BMW, Daimler and VW 'collusion'
  2. Spain wants special Gibraltar chapter in Brexit deal
  3. Italy cancels Vienna talks over South Tyrol 'dual citizenship'
  4. Britain will not accept Brexit deal with Irish Sea border
  5. Slovakia seeks witness to journalist killing
  6. Finland's Stubb considers running for EU commission job
  7. Romania ponders anti same-sex marriage referendum
  8. EU lawyers back Slovenia in Croatia border dispute

Interview

New book: Why war is coming

War is the likely outcome of current geopolitical trends - the decline of democracy and rise of authoritarian nationalism - says Belgian writer Koert Debeuf in his new book 'Tribalisation', to be launched in New York this week.

Stakeholders' Highlights

  1. NORDIC COUNCIL OF MINISTERSThe Nordic gender effect goes international
  2. NORDIC COUNCIL OF MINISTERSPaula Lehtomaki from Finland elected as the Council's first female Secretary General
  3. NORDIC COUNCIL OF MINISTERSNordic design sets the stage at COP24, running a competition for sustainable chairs.
  4. Counter BalanceIn Kenya, a motorway funded by the European Investment Bank runs over roadside dwellers
  5. ACCACompany Law Package: Making the Best of Digital and Cross Border Mobility,
  6. IPHRCivil Society Worried About Shortcomings in EU-Kyrgyzstan Human Rights Dialogue
  7. UNESDAThe European Soft Drinks Industry Supports over 1.7 Million Jobs
  8. Mission of China to the EUJointly Building Belt and Road Initiative Leads to a Better Future for All
  9. IPHRCivil society asks PACE to appoint Rapporteur to probe issue of political prisoners in Azerbaijan
  10. ACCASocial Mobility – How Can We Increase Opportunities Through Training and Education?
  11. Nordic Council of MinistersEnergy Solutions for a Greener Tomorrow
  12. UNICEFWhat Kind of Europe Do Children Want? Unicef & Eurochild Launch Survey on the Europe Kids Want

Latest News

  1. EU promotes 'Egypt model' to reduce migrant numbers
  2. Tensions mount over Kosovo-Serbia deal
  3. New book: Why war is coming
  4. EU parliament will not budge on office expenses
  5. Why Orban's project to reshape EU politics will be unsuccessful
  6. 10 years after Lehman Brothers what has changed for EU consumers?
  7. Sefcovic launches bid to be EU Commission president
  8. Is Russia blackmailing the Council of Europe?

Stakeholders' Highlights

  1. Nordic Council of MinistersNordic Countries Take a Stand for Climate-Smart Energy Solutions
  2. Mission of China to the EUChina: Work Together for a Better Globalisation
  3. Nordic Council of MinistersNordics Could Be First Carbon-Negative Region in World
  4. European Federation of Allergy and AirwaysLife Is Possible for Patients with Severe Asthma
  5. PKEE - Polish Energy AssociationCommon-Sense Approach Needed for EU Energy Reform
  6. Nordic Council of MinistersNordic Region to Lead in Developing and Rolling Out 5G Network
  7. Mission of China to the EUChina-EU Economic and Trade Relations Enjoy a Bright Future
  8. ACCAEmpowering Businesses to Engage with Sustainable Finance and the SDGs
  9. Nordic Council of MinistersCooperation in Nordic Electricity Market Considered World Class Model
  10. FIFAGreen Stadiums at the 2018 Fifa World Cup
  11. Mission of China to the EUChina and EU Work Together to Promote Sustainable Development
  12. Counter BalanceEuropean Ombudsman Requests More Lending Transparency from European Investment Bank

Join EUobserver

Support quality EU news

Join us