Panama Papers Committee of Inquiry – great success for the No to Tax Havens campaign!

Successful No to Tax Havens petition against tax avoidance, money laundering and co.

Huge success for the petition, by which the No to Tax Havens campaign within the scope of the Panama Papers Committee of Inquiry appealed to MEPs! Many of our demands have been included in the Committee’s final report, which has now been voted on in the European EU Parliament. This has been made possible by the vast number of supporters of the petition, which must have made an impression on the MEPs.

Minimum income tax rate, protection for whistleblowers, ban on letterbox companies…

The report by the Committee is packing a punch: hence, the text, which was agreed by the majority of MEPs, does not only condemn the tax dumping policy of several EU Member States; the report even directly mentions and criticises the political responsibility of the governments of the United Kingdom, Luxembourg, Cyprus and Malta in respect of money laundering and tax haven policy at the expense of other EU countries. MEP Markus Ferber for example criticized the tax haven Madeira.
The Panama Papers Report includes the following direct demands:

  • Mandatory public Country-by-Country reporting – a fundamental requirement to ensure that multinationals pay tax on their profits in which they have been generated.
  • A Common Consolidated Corporate Tax Base including the introduction of effective EU minimum tax rates on profits.
  • A ban on letterbox companies. An important demand as such companies are normally not economically active but just serve the purpose of shift profits.
  • According to the will of MEPs, lawyers, tax consultants and notaries – too often accessories in respect of tax evasion – shall be subject to public supervision and have to provide information on their aggressive tax planning models.
  • Abolition of the principle of unanimity with regard to tax issues. This demand was also recently made by EU Commission President Jean-Claude Juncker in his State of the Union Address.
  • A Black List for tax havens, which shall also include EU countries. The MEPs even demand concrete sanctions for countries on that list.
  • More protection for whistleblowers and creation of a fund for covering financial damage, which might occur to them.

All points mentioned above, were key demands of the No to Tax Havens campaign and able to gain acceptance in the Committee! Even more comprehensive positions, such as the demand by MEP Evelyn Regner to establish a fund, which should cover financial damage, which might affect whistleblowers, won through.

Murder on journalist overshadows vote

The partial victory concerning the work against tax haven was overshadowed by the murder on the Maltese journalist Daphne Caruana Galizia. Most recently she had published documents, which showed that two confidantes of the Maltese Prime Minister Muscat had shifted large amounts of money to offshore accounts. MEPs Sven Giegold said that this terrible case showed how much money launderers and tax evaders would fear investigative work. Hence, one had to get behind the whistleblowers.

What is next?

The vote on the Committee Report will probably take place in the plenum in December 2017. Amendments in the final resolution text are still possible because the Committee accepted some demands only with a narrow majority.
The Resolution of the European Parliament will then be conveyed to the Commission and the Council. Hence, the pressure on the decision makers to ensure more tax justice and fairness will probably continue to increase.