EU seeks broader crackdown on corporate tax loopholes

The European Union stepped up the fight against corporate tax avoidance Thursday, unveiling proposals including an EU-wide blacklist of international tax havens, as part of a wider clampdown on firms using loopholes to reduce their tax bills.

The EU's executive estimates that member states are deprived of up to 70 billion euros (76 billion dollars) in tax revenues from multinational companies each year, more than five times the bloc's funding on Europe's refugee crisis in 2015-16.

"Certain companies are using loopholes in the 28 national systems in the EU to avoid taxation," said EU Economy Commissioner Pierre Moscovici, money that could be used for public services such as schools and hospitals.

"People have to trust that the tax rules apply equally to all individuals and businesses," added EU Commission Vice President Valdis Dombrovskis.

The steps proposed Thursday include outlawing some of the most commonly used tax avoidance schemes; sharing tax-related information on multinationals among member states; and compiling a blacklist of non-EU countries that refuse to cooperate in the tax clampdown.

The EU-wide blacklist would replace a patchwork of existing national approaches, creating common standards and giving the bloc greater clout when dealing with tax havens, the commission argued.

The proposal, which will need the approval of EU governments and lawmakers to become law, would also bring the bloc in line with common guidelines agreed by the Organization for Economic Co-operation and Development (OECD) last year.

But industry association BusinessEurope warned that firms in Europe could be at a disadvantage if other countries do not take similar steps.

"The EU must not act as lone front-runner in implementing the OECD ... agreement, and must not undermine the competitiveness of EU industry or damage the EU's attractiveness as an investment location," said Markus Beyrer.

The influential Federation of Germany Industry (BDI) also urged caution, with its managing director Markus Kerber warning that the package of measures "poses a danger for the German economy," in comments to the Handelsblatt newspaper.

"It could lead to double taxation at the cost of companies, or to disagreements between EU states on where a company has to pay its taxes," he added.

But the centre-right European People's Party (EPP), the largest group in the European Parliament, welcomed the proposals as a "moment of truth."

"States which oppose these rules want to base their economies on taking bread out of the mouths of others", said EU lawmaker Burkhard Balz of the EPP.

The commission is also investigating several member states for tax arrangements granted to multinationals including US technology giant Apple, online retailer Amazon and fast food giant McDonalds.

Luxembourg and the Netherlands have been ordered to recoup unpaid taxes from the financing arm of Italian carmaker Fiat and US coffee retailer Starbucks respectively.

Last update: Fri, 24/06/2016 - 08:49

More from Europe

Bulldozers converge on charred remains of Calais migrant camp

Smoke rose over the remains of the charred migrant camp near the northern port city of Calais on Thursday, as most...

Putin: "stupid" to think Russia is preparing attack on NATO state

Russia is not preparing to attack a NATO member state, as that is "just unthinkable, stupid and unrealistic,"...

Germany denies custody to refugee who put his baby up for sale online

A man who offered his 40-day-old baby girl for sale on the internet has been denied custody of his daughter and will...

Italy seizes 77 million euros of cocaine from ship coming from Brazil

Some 385 kilogrammes of "very pure" cocaine, with a market value of 77 million euros (85 million dollars), were...

Report: Survivors tell Italian police 51 migrants missing at sea

Fifty-one migrants are missing in the Mediterranean Sea, people who were travelling with them told Italian police...