News

Brussels madness: EU to punish LOW TAX member states as anti-competitive

Brussels will be targeting sweetheart tax deals in particular, which often involve tax breaks or other advantages which aim to bring business to that particular member state. The crackdown would amount to an unprecedented legal assault, as the European Commission explores ways to trigger an unused treaty instrument to use to their advantage.

The initiative would aim to reduce multinationals’ ability to exploit advantageous corporate tax schemes and attempt to harmonise tax regimes across the bloc.

And the plan will only require the backing of a qualified majority of the EU’s 27 member states.

This is opposed to the normal procedure that would require unanimous support of all countries and makes it unique among tax legislation in the EU.

The plans would also restrict a government’s ability to wield a veto as the measure would also need approval from the European parliament.

The initiative would aim to reduce multinationals’ ability to exploit advantageous corporate tax schemes and attempt to harmonise tax regimes across the bloc.

And the plan will only require the backing of a qualified majority of the EU’s 27 member states.

This is opposed to the normal procedure that would require unanimous support of all countries and makes it unique among tax legislation in the EU.

The plans would also restrict a government’s ability to wield a veto as the measure would also need approval from the European parliament.

JUST IN: Ryanair bomb scare: RAF Typoon jets scrambled after ‘bomb note’ scare

Tax avoidance by multinationals has shot up the political agenda in the wake of the pandemic which has savaged global economies worldwide.

Governments around the world have been spending billions to kick-start their economies .

The commission has also promised to revive its plans for an EU digital services tax on big technology companies after the US pulled out of international negotiations last month.

The plans were revealed by officials last week, who said the aim was to identify certain competitive national tax schemes which could be seen as breaking single market rules.

The moves are likely to trigger intense controversy among member states, which fiercely protect their taxation powers.

The measures are found under Article 116 of the EU’s treaty, and are a very early stage.

There are a number of controversial decisions ahead which could affect Brussels’ power to carry out the plans.

On Wednesday, the General Court, the EU’s second-highest court, will decide whether the commission was correct to order Apple to pay €13bn in back-taxes to the Irish government in 2016.

Were that decision to be struck out by judges, there would be significant implications for the commission’s ability to pursue multinationals.

One EU insider said: “If the commission loses the Apple case then it is running out of tools to go after aggressive tax planning.”
Brussels has in the past made numerous attempts to clamp down on aggressive tax planning schemes.

However, the moves have been traditionally vetoed by countries with more favourable tax rules.

Another diplomat added the commission said Brussels needed guarantees that it would not be struck down by a blocking minority of governments.



Tags

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button
Close
Close