EU clamps down on corporate multi-billion tax avoidance
By Francesco Guarascio
BRUSSELS (Reuters) - The European Commission weighed into the row about multinational corporations avoiding tax on Thursday, proposing to clamp down on companies shifting their profits to low-tax countries.
It also said it wanted a step up of rules governing the disclosure of tax data.
Business and banks warned that the measures could hurt competitiveness, deter investment and increase administrative costs.
Big corporations legally avoid taxes of up to 70 billion euros ($76.10 billion) a year in Europe, a study of the European Parliament has estimated, with global losses from such schemes ranging between $100 billion and $240 billion.
A lot of it comes from reporting profits made in one high-tax country in another with lower tax bands.
"Billions of euros are lost every year to tax avoidance. This is unacceptable and we are acting to tackle it," the EU tax commissioner Pierre Moscovici said in a statement calling "for fair and effective taxation for all Europeans."
Responding to such criticism in Britain, Google agreed last week to pay 130 million pounds ($185 million) in back taxes, but it was seen by many as too little compared with the profits made by the company in Britain.
Among the Commission's proposals - which would have to be approved by all European Union member states - is one to allow EU countries to tax profits generated in their territories even if transferred somewhere else, providing the effective tax rate in the country where the profits are transferred is less than 40 percent of that of the original country. Continued...