Sunday

17th Feb 2019

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.

Sluggish procedure against Hungary back on table

EU probes into Hungary and Poland on rule of law and democracy are back on the agenda of EU affairs ministers - but with little guidance from the Romanian presidency, without a clear idea where the procedures are headed.

News in Brief

  1. Spain's Sanchez calls snap election on 28 April
  2. 15,000 Belgian school kids march against climate change
  3. May suffers fresh Brexit defeat in parliament
  4. Warning for British banks over Brexit staff relocation
  5. Former Italian PM wants Merkel for top EU post
  6. Antisemitic incidents up 10% in Germany
  7. Italy's asylum rejection rate at record high
  8. Hungary will not claim EU funds for fraudulent project

Agenda

Brexit and trip to Egypt for Arab League This WEEK

Brexit talks will continue in Brussels, as UK PM Theresa May's government is trying to find a way out of the political impasse at home. Murdered Saudi journalist Jamal Khashoggi's fiancee will speak at the European Parliament next week.

Saudis paying College of Europe to lobby MEPs

The Bruges-based College of Europe is setting up private meetings with the EU institutions for seven ambassadors plus seven high-level officials from the Kingdom of Saudi Arabia.

Stakeholders' Highlights

  1. Counter BalanceEU bank urged to free itself from fossil fuels and take climate leadership
  2. Intercultural Dialogue PlatformRoundtable: Muslim Heresy and the Politics of Human Rights, Dr. Matthew J. Nelson
  3. Platform for Peace and JusticeTurkey suffering from the lack of the rule of law
  4. UNESDASoft Drinks Europe welcomes Tim Brett as its new president
  5. Nordic Council of MinistersNordic ministers take the lead in combatting climate change
  6. Counter BalanceEuropean Parliament takes incoherent steps on climate in future EU investments
  7. International Partnership For Human RightsKyrgyz authorities have to immediately release human rights defender Azimjon Askarov
  8. Nordic Council of MinistersSeminar on disability and user involvement
  9. Nordic Council of MinistersInternational appetite for Nordic food policies
  10. Nordic Council of MinistersNew Nordic Innovation House in Hong Kong
  11. Nordic Council of MinistersNordic Region has chance to become world leader when it comes to start-ups
  12. Nordic Council of MinistersTheresa May: “We will not be turning our backs on the Nordic region”

Latest News

  1. Sluggish procedure against Hungary back on table
  2. Could Finnish presidency fix labour-chain abuse?
  3. Brexit and trip to Egypt for Arab League This WEEK
  4. Belgian spy scandal puts EU and Nato at risk
  5. EU Parliament demands Saudi lobby transparency
  6. Saudi Arabia, but not Russia, on EU 'dirty money' list
  7. EU agrees draft copyright reform, riling tech giants
  8. Rutte warns EU to embrace 'Realpolitik' foreign policy

Stakeholders' Highlights

  1. International Partnership for Human RightsOpen letter to Emmanuel Macron ahead of Uzbek president's visit
  2. International Partnership for Human RightsRaising key human rights concerns during visit of Turkmenistan's foreign minister
  3. Nordic Council of MinistersState of the Nordic Region presented in Brussels
  4. Nordic Council of MinistersThe vital bioeconomy. New issue of “Sustainable Growth the Nordic Way” out now
  5. Nordic Council of MinistersThe Nordic gender effect goes international
  6. Nordic Council of MinistersPaula Lehtomaki from Finland elected as the Council's first female Secretary General
  7. Nordic Council of MinistersNordic design sets the stage at COP24, running a competition for sustainable chairs
  8. Counter BalanceIn Kenya, a motorway funded by the European Investment Bank runs over roadside dwellers
  9. ACCACompany Law Package: Making the Best of Digital and Cross Border Mobility,
  10. International Partnership for Human RightsCivil Society Worried About Shortcomings in EU-Kyrgyzstan Human Rights Dialogue
  11. UNESDAThe European Soft Drinks Industry Supports over 1.7 Million Jobs
  12. Mission of China to the EUJointly Building Belt and Road Initiative Leads to a Better Future for All

Join EUobserver

Support quality EU news

Join us