Sunday

22nd Jan 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).

Dear EUobserver reader

Subscribe now for unrestricted access to EUobserver.

Sign up for 30 days' free trial, no obligation. Full subscription only 15 € / month or 150 € / year.

  1. Unlimited access on desktop and mobile
  2. All premium articles, analysis, commentary and investigations
  3. EUobserver archives

EUobserver is the only independent news media covering EU affairs in Brussels and all 28 member states.

♡ We value your support.

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.

Trump pledges US-first foreign policy

Economic protectionism and war on Islamist terrorism will form the heart of US foreign policy, Trump has said. He did not rubbish Nato, but indicated interest in a new Russia alliance.

GMO opt-out plan remains in waiting room

The commission wants to give the power to member states to reject EU-approved genetically modified organisms, but the Maltese presidency is unlikely to approach the issue any time soon.

Stakeholders' Highlights

  1. Caritas EuropaEU States to Join Pope Francis’s Appeal to Care for Migrant Children
  2. UNICEFNumber of Unaccompanied Children Arriving by sea to Italy Doubles in 2016
  3. Nordic Council of Ministers"Nordic Matters" Help Forge Closer Bonds Between the UK and the Nordic Region
  4. Computers, Privacy & Data ProtectionThe age of Intelligent Machines: join the Conference on 25-27 January 2017
  5. Martens CentreNo Better way to Lift Your Monday Blues Than to Gloss Over our Political Cartoons
  6. Dialogue PlatformThe Gulen Movement: An Islamic Response to Terror as a Global Challenge
  7. European Free AllianceMinority Rights and Autonomy are a European Normality
  8. Swedish EnterprisesHow to Create EU Competitiveness Post-Brexit? Seminar on January 24th
  9. European Jewish CongressSchulz to be Awarded the European Medal for Tolerance for his Stand Against Populism
  10. Nordic Council of Ministers"Adventures in Moominland" Kick Off Nordic Matters Festival in London
  11. PLATO15 Fully-Funded PhDs Across Europe on the Post-Crisis Legitimacy of the EU - Apply Now!
  12. Dialogue PlatformInterview: Fethullah Gulen Condemns Assassination of Russian Ambassador to Turkey