EU launches drive to stop tax evasion by multinationals, plans for new rules next month
BRUSSELS (AP) — The European Union has launched a drive to combat tax evasion following a series of probes into rules that allow multinationals to slash their bills in Luxembourg, Ireland and the Netherlands.
The EU’s executive commission said Wednesday that it will propose new tax legislation next month, including on the automatic exchange of information about tax rulings.
Commission Vice President Valdis Dombrovskis said the EU “must reassure people that the tax burden is distributed fairly and the tax rules shall apply equally to all citizens and businesses.”
The 28-country EU has pledged to crack down on tax rulings favoring big firms.
The Commission, which polices state aid rules, launched an investigation on Feb. 3 to establish whether a Belgian tax provision allows some companies to substantially reduce their liabilities.
It opened probes last year into Apple in Ireland, Starbucks in the Netherlands and Amazon in Luxemburg.
EU countries share little information about corporate tax rulings, making it difficult for tax authorities to work out where a company’s real business takes place and to apply the rules fairly.
The Commission said that many multinationals are taking advantage by shifting profits and that this deprives EU governments of tax revenues.
Last week, the EU set up a special committee to look into national tax rules following reports based on leaked documents that alleged sweet deals were made for big multinationals in Luxembourg.
The European Parliament committee will examine a cache of leaked documents on those deals as well as other incidents of tax avoidance and evasion in Europe involving companies from around the world.
It will be similar to the one set up to probe prisoner rendition allegations against the CIA and will have the power to propose legislation to address any issues it uncovers.
Copyright 2015 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
