EU to require sharing of corporate deals to curb tax avoidance
BRUSSELS (Reuters) - European Union countries will have to share information on tax deals agreed with major corporations under European Commission plans to limit the ability of big business to avoid tax across the 28-nation bloc.
EU members would from next year have three months to tell neighbors about new cross-border tax rulings and also have to divulge information on existing deals, European Economics Commissioner Pierre Moscovici said on Wednesday.
These rulings provide guarantees on how a company will be taxed, but can be exploited by artificially shifting profits to the country where the rates are lowest.
The Tax Transparency Package (TTP) comes after international criticism of the tax practices of Luxembourg, based on the "LuxLeaks" disclosures, showing corporations secured beneficial rulings to minimize their tax due on operations in Europe.
"The Commission feels it's time to establish fiscal equity, so that companies pay what they owe, their fair share to the right place," Moscovici said.
"There will be no escape clause and no room for interpretation on these requirements. It will be simple. It's automatic."
The European Commission is also investigating whether the tax arrangements in Luxembourg for U.S. retailer Amazon and a unit of Italian carmaker Fiat amounted to unfair state aid, as well as looking into the treatment of Starbucks by the Netherlands and Apple by Ireland.
Critics such as anti-poverty charity Oxfam said the latest proposals did nothing to prevent tax dodging, but Moscovici denied they lacked teeth.
"Good behavior will hopefully chase out bad behavior. Tax avoidance is bad publicity for companies," he said. Continued...