TAX2 delegation to tax haven USA
GUE/NGL coordinator in the special committee on tax rulings and other measures similar in nature or effect (TAX2), Fabio De Masi, is taking part in a delegation to Washington D.C. this week. MEPs will meet counterparts from the US Congress, the Justice and Finance Ministries, the International Monetary Fund and the World Bank as well as the International Consortium of Investigative Journalists and tax justice NGOs. Talks will also touch on conflicts of interest between the US and the European Commission with respect to on-going state aid investigations and measures against tax havens in light of the LuxLeaks and Panama Papers scandals.
Fabio De Masi comments ahead of the visit:
“The US have become a big player in the tax haven business with secrecy jurisdictions such as Delaware and Nevada. They are also the only remaining country that refuses to exchange tax information in a reciprocal way in accordance with OECD standards.
“But the EU is not lagging far behind given its own tax havens like Luxembourg and the entirely insufficient anti-money laundering provisions in countries like Germany. It would also be wise to draw inspiration from the US' tough stance against third country banks under FATCA and the robust mandate for parliamentary inquiries in the US Congress compared to which the powers of the European Parliament seem ridiculously limited.”
De Masi continues: “The Commission's state aid investigations won't do the trick against tax dumping. Transfer pricing analyses according to the arm's length principle can be too easily challenged in the courts – or by third parties such as the US government – and the principle of selectivity (discrimination of one company vis-a-vis its competitors) in combination with the Commission's limited staff resources makes an encompassing investigation impossible. It is however equally hypocritical if US corporations refer to their tax liability in the US when fending off calls for higher effective taxation in the EU, as this liability is indefinitely deferred and profit repatriation only happens when the US offers generous tax amnesties.”
De Masi concludes: “Bernie Sanders' success in the Democratic primary campaign shows that the majority of people in the US and the EU – working hard, paying tax and abiding by the law – has had enough of the tax cheats and criminal activities of big corporations and the rich and powerful.
“In the EU, we need taxation where profits are actually generated and we need corporate criminal law provisions also covering legal and financial service providers to effectively deter white-collar crime. Those who aid tax evasion, money laundering and terrorist financing should have their business licences revoked. The EU's 4th anti-money laundering directive needs urgent revision to close loopholes on nominee directors and make beneficial ownership registries public. In addition, we need preventive taxation at the source of financial flows into tax havens and a public country-by-country reporting for all jurisdictions. The Commission's black listing exercise is futile without full coverage, including US tax havens, and meaningful sanctions.”
GUE/NGL Press Contact:
Gay Kavanagh +32 473 84 23 20
Nikki Sullings + 32 483 03 55 75