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THE HEADS of the 27 European Union member states have asked the European Commission to come up with a plan to address the concerns over “aggressive tax planning” by major multinational corporations.
The agreement between political leaders in Brussels comes only a day after Ireland came under international scrutiny for the tax arrangements exploited by companies like Apple and Google.
Leaders called on the European Commission, led by Jose Manuel Barroso, to formulate recommendations on how “aggressive tax planning” and “profit shifting” could be dealt with.
The Commission now plans to present a revised version of the ‘Parent/Subsidiary Directive’, a rule introduced in 2003 which abolished withholding tax on payments between related companies in multiple countries.
Tax-free payments between related companies in different EU member states is a key part of the ‘Dutch sandwich’ taxation system used by companies like Google.
In that system, an Irish company collects revenue for sales around the world, transfers it tax-free to a company in another EU state (usually the Netherlands), and then transfers it back to an Irish-registered company which is actually based in a low-tax jurisdiction like Bermuda.
The Commission said it would also review the current EU laws relating to abuse of the taxation system.
Today’s summit – one of the briefest European Council meetings in modern times – had been due to discuss tax evasion for several weeks, but the meeting took on an extra significance after a United States Senate committee asked Apple executives to give evidence about the country’s use of Ireland as a “tax haven”.
Asked how this latest drive against tax fraud and tax avoidance would make progress when others had failed, European Council president Herman van Rompuy said the economic crisis now meant there was an imperative on countries to ensure they were not losing income.
“What is different? The economic crisis makes the difference,” he said.
European Commission president Jose Manuel Barroso called on members of the public to maintain pressure on their political leaders so that the agreements reached today were followed through.
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This is good for them but not for Ireland.
In waht way is the fact that large corporations are dodging paying tax good for Ireland .
We are taxed – and with lots of taxes – why should they be able to blackmail goverments to give them access to tax dodging .
Anyway I have garve doubts about the sincerity of EU leaders or anyone else in taking on these gigantic corporations like Google and Walmart , and Apple re tax dodging – but as they seee that their / our economies are stagnating – maybe they might do something .
related to this is the call from IMF spokesman today for UK to devolop infrstructure more to ——–wait for it —
——– ” offset Austerity ”
http://www.aljazeera.com/news/europe/2013/05/2013522172316240606.html
Article from a couple of weeks ago explaining how our tax system benefits us at the expense of our neighbours. This was before the current issue with Apple was raised.
”Article from a couple of weeks ago explaining how our tax system benefits us at the expense of our neighbours. This was before the current issue with Apple was raised.”
Yes – I read in the Independent the other day that economy was recovering – to some extent anyway – but there appears to be a disconnect between the Economy – and how the majority of citizens are doing . First emigration is main reason unemployment is at 14% [ only !!]
and 2nd -
I repeat – we are being blackmailed by these masive corportaions to give them tax evading facilities – or else .
The issue was on c4 news a few days ago – and if all countries co-operated – they would have to pay at least some more tax .
If eg spain offered same ”facilities ”as Ireland – we would have to cut sometjhing again for the big companies eg wages – it is a Race to the Bottom .
I’m not arguing there’s a disconnect between how well our economy is doing and how well the people are doing; this seems to be the case everywhere as large corporations have bought governments to the extent they have more influence that the people. However, in our particular case we have made a deal with the devil to allow large corporations to use Ireland as a tax haven while gaining minimal benefits that, in the context of our small failing economy, have become more substantial. This has helped to somewhat ease the burden on our people with the only cost being a disproportionately negative impact on other nations. It is not the only factor as you point out. Unemployment is relatively low due to emigration (I myself spent more than two years on the dole in Ireland and now I write this sitting in Australia with a good job still wishing I could get on a plane home tomorrow). However, in the context of Europe making us pay to bail out the European banking system and for the lender to bare no responsibility for their bad debts, I’m more than happy for Ireland to undermine our neighbour’s tax income in the short to medium term, even if there was no real benefit to Ireland. It highlights how ridiculous our common economy was and still is and how badly thought out the whole thing was. They used this flawed mechanism to screw us over (along with two of our own cowardly governments) so it’s a bit of ironic justice that we’re using it to get them back, especially when they have the gall to complain about it with a straight face.
An exquisite collection of anti-business people headed by an former Maoist – these is the future of Europe? Only a fool can have faith in such future.
… who preach the virtues of competition, but get all hot and bothered when it’s applied to them.
Fair play to apple for exploiting the system sure we would all love to pull that stunt ourselves,damn PAYE.
Makes quiet a collection don’t they…
Another plan by our esteemed EU leaders? I can see that happening…
Chances of successfully implementing that are probably in the 80 – 90% range.
Which is an effective range of 10-15%
Financial Transactions Tax (FTT on Banks) should be first on the agenda NOT taxing families in their Family Homes – with the Local Property Tax.
The EU had better attack the taxing of every Family Home in Europe and remove this immoral tax from Families before they are attacked at the next ballot box. Get your own home in order first.
——————————————–
FB/LocalPropertyTax
Money and investments will pour out of Europe.
WHAT A BUNCH OF CRIMINALS, THERE SHOULD BE A NUREMBERG PART 2 HELD IN BRUSSELS THIS TIME AND ALL THESE SHOULD PAY
Its gas that they asked mr borosso along with the rest of the unelected commission for advice on matters such as this.. as if this fella or anybody like him could play a similar roll to a modern day robbing hood taking money from the rich and giving to the poor … reminds me more of the star wars film with the eu empire.. van rom damp rag being the emperor borroso being dark vader and well enda he’s just a minion i suppose
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