Secret tax archives: UK joins move to block MEPs’ access

Treasury says making available documents detailing tax policies tailored for multinational firms would jeopardise ‘open and frank discussions’

The UK has joined Luxembourg, the Netherlands and Belgium in blocking attempts by a committee of MEPs to gain access to secret European archives that detail some of most controversial tax policies tailored for multinationals over almost two decades.

Over 17 years, a trove of technical documents, minutes of meetings and discussion papers has been shared in Brussels by member states in a little-known EU group, sitting in private, which was set up to fight against harmful tax competition and to curb aggressive tax avoidance by multinationals.

While the EU’s code of conduct group on business taxation is widely seen as having achieved little, a special committee of MEPs is keen to access its files as they explore the reasons behind Europe’s failure to curb aggressive corporate tax planning.

The special committee of MEPs was set up by the European parliament this year in response to the LuxLeaks scandal, which a year ago on Thursday exposed the industrial scale on which Luxembourg’s tax office was privately granting generous tax deals to global corporations.

Many of the LuxLeaks deals involved draining taxable income from neighbouring countries and resulted in tax rates of less than 1% in the Grand Duchy.

While politicians around Europe were quick to condemn sweetheart deals for multinationals, plans for a concerted crackdown have been mired in disagreement. Now a group of politicians, academics and campaigners have written a letter to the Guardian calling on the European commission and member states to ignore fierce corporate lobbying and redouble their efforts.

Signatories include the former president of the European commission, Romano Prodi, the UK shadow chancellor, John McDonnell, and the economist Thomas Piketty. Tax campaigners will protest outside more than a dozen finance ministries around Europe to mark the anniversary of the LuxLeaks scandal.

The European commission has said it is happy for MEPs to see the archives of the code of conduct group in private, but has asked each member state to provide consent.

Most major economies, including France, Germany and Italy, have agreed to allow MEPs access to some of the papers they contributed to the archive. But 13 have not. They include Belgium, Latvia, Estonia, Malta, the Netherlands, Spain and the UK.

Asked why Britain was not joining other major economies and allowing MEPs to review the papers, the Treasury told the Guardian that doing so would jeopardise the likelihood of candid discussions and information-sharing in the future.

It said: “As direct taxation is a matter for EU countries, discussion on these matters takes place between governments and information … [is] provided that is confidential in nature.”

Keeping documents secret, the Treasury added, meant countries could have “open and frank discussions on strengthening tax rules and on ensuring these are followed across the EU”.

This explanation was met with scepticism by some tax campaigners. Margaret Hodge MP, the former chair of the UK’s public accounts committee, said: “I deeply regret the UK’s attitude. There is a growing body of evidence that the UK has joined the offenders – like the Netherlands, Luxembourg and Ireland – in evolving new tax reliefs and practices which create quasi-tax-haven conditions here in the UK.”

Fabio de Masi, a leftwing German MEP who sits on the special committee, said: “You only get tax justice in Europe if the dirty laundry is being sifted. We’ve learned that from LuxLeaks. I am an elected member of parliament and it is my duty to know whether member states allow multinationals to empty the pockets of citizens.”

The UK’s position is a particular frustration to MEPs as other countries, notorious for aggressive tax competition, are using it to excuse their own non-cooperation. Luxembourg, for example, has told the special committee it will provide access to documents if all other member states do the same.

The Guardian asked the Dutch finance ministry why it was blocking MEPs’ access to the papers. It said: “If reports are to be shared, that should be told to participants in advance … [We] feel bound by the promise of confidentiality. This is not changed by the fact that some countries decided not to be.”

Tax avoidance controversies in the Netherlands have been in the spotlight in recent weeks after Brussels competition authorities ruled that a sweetheart tax deal offered in private to US coffee chain Starbucks was so generous it amounted to illegal state aid.

Last month, the Guardian exposed a $2.7bn (£1.9bn) lending structure set up in the Netherlands by drugs group AstraZeneca to avoid UK tax. The structure had been signed off by the Dutch authorities in a private tax ruling, sometimes known as a “letter of comfort”.