EU launches tax action plan to crack down on sweet deals

Author: Associated Press

BRUSSELS (AP) – The European Union’s tax watchdog unveiled on Wednesday a plan for tackling corporate tax avoidance and ending the practice of sweet deals for multinational companies.

The EU’s executive Commission also published a blacklist of 30 countries it says are not doing enough to crack down on tax avoidance. The list ranges from Belize to Panama, European principalities like Monaco to Hong Kong and Pacific nations like Vanuatu.

“These tax havens cover the five continents,” said Pierre Moscovici, the EU’s top tax official. He urged them to quickly adopt “agreed international standards” to fight against tax evasion.

The plan aims to make sure that multinationals pay taxes where they generate profits, that tax rules in one country do not penalize others, and that honest businesses don’t lose out to unscrupulous competitors.

“Our citizens can no longer tolerate that certain companies, often the most prosperous, avoid fair tax contributions and that certain tax regimes encourage them on this path,” Moscovici said.

The move is part of a wider crackdown that has followed the leak of documents alleging some multinationals have preferential tax deals with Luxembourg. The EU set up a committee in February to probe national tax rules in the wake of the scandal.

The Commission also opened tax investigations last year into Apple in Ireland, Starbucks in the Netherlands and Amazon in Luxembourg. On June 8, it set a one-month deadline for Estonia and Poland to provide long-overdue information about their tax practices or face court action.

The focus now is to create a single set of rules for companies in the EU to use in calculating their profits, and to ensure that the taxes are actually paid. Another aim is increasing transparency, with the Commission considering whether to force companies to make certain tax information public.

The EU blacklist is made up of countries that figure on at least 10 national lists of tax havens compiled by the 28 member nations. Luxembourg is not on it.

Half the countries are from the Americas. The full list is: Anguilla, Antigua and Barbuda, Bahamas, Barbados, Belize, Bermuda, British Virgin Islands, Cayman Islands, Grenada, Montserrat, Panama, Saint-Vincent and the Grenadines, Saint Christopher and Nevis, Turks and Caicos Islands, U.S. Virgin Islands, Andorra, Guernsey, Liechtenstein, Monaco, Liberia, Mauritius, Seychelles, Brunei, Hong Kong, Maldives, Cook Islands, Nauru, Niue, Marshall Islands and Vanuatu.

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