Serious losses through tax tricks by large corporations and the super rich
Exposing the Panama tax haven scandal (Panama Papers) in April 2016 meant that numerous cases of tax avoidance, tax evasion and money laundering came to light. According to a Study of the European Parliament, the losses, which were uncovered through the Panama Papers, may be as high as € 237 billion. This amount could have created 3.5 million jobs. A number of prominent people from business, politics, sport and society, who avoided paying tax via letterbox companies in Panama, came under great pressure through the disclosed documents and some of them had to resign their position.
Members of the European Parliament launch investigation
In the wake of the Panama Scandal, the European Parliament has set up its own Inquiry Committee, which will investigate abuses and possible statutory violations in connection with tax evasion and avoidance as well as money laundering.
The Members of the European Parliament (MEPs) intend to adopt a report before the end of the year, which is to contain measures as to how to put an end to the aggressive tax avoidance constructions of large corporations and the super rich.
Successful petition to the MEPs
Within the Nototaxhavens campaign we started a petition to the Members of the European Parliament. We have asked the MEPs of the PANA-Inquiry Committee in an email (see below) to take a clear position against money laundering, tax avoidance and evasion. About 3000 people supported the petition – with success: Many of our demands have been taken into account by the MEPs and will be debated at the inquiry committee. The vote of the text of the resolution will take place at the European Parliament in November/December 2017.
Email to the Members of the Committee of Inquiry at the European Parliament
For some years now, more and more new cases of tax avoidance and -evasion committed by large corporations and wealthy individuals have been exposed. The cost to the population is enormous: According to a EU Parliament study, the tax revenue lost in case of the Panama Papers may be as high as € 237 billion.
The European Parliament has swiftly reacted to the exposed documents and data and set up two special committees in case of LuxLeaks and one enquiry committee based on the Panama Papers.
With regard to the planned report of the PANA Inquiry Committee, I would like to ask you to take a clear position against the tax tricks of companies and wealthy individuals and to take among other the following points into consideration:
- During the course of the investigations regarding tax havens, it has once again become clear that the European Union itself has numerous tax havens, which companies are able to use in order to avoid paying tax in their EU country of origin. The conduct of individual Member States is at the expense of society, which has to make up for the missing tax revenue. Apart from that, the wrangling for the lowest corporate tax is leading to competitive distortions.
To stop the tax competition among EU Member States, I would like to ask you to support, apart from the Country-by-Country Reporting and the Common Consolidated Corporate Tax Base, in particular an EU-wide Common Minimum Corporate Tax Rate.
Unfortunately, tax policy issues at Council level are often blocked by individual Member States. This protects tax havens and is a heavy burden to the EU population. Hence, a key demand therefore has to be the abolishment of the principle of unanimity in the Council concerning tax issues. Only then, it will be possible to make progress in the fight against tax evasion.
The criteria defined by EU Finance Ministers, which have to be fulfilled to put a country on the tax haven blacklist, are more than disappointing. According to this, countries, which have laid down a corporate tax rate of 0 %, shall not come under the category ‘tax haven’. In doing so, the value of the black list as an instrument in the fight against tax evasion is significantly diminished. Hence, the result of the negotiations on the tax haven blacklist in the EU Council of Finance Ministers has to be criticised; this has to be urgently tightened. The black list must include the most prominent countries engaged in tax evasion and not only ‘supporting acts’, which hardly play a role as a tax haven.
Intermediaries such as auditors, law firms or financial advisors are playing an important role with regard to aggressive tax avoidance strategies. I therefore demand
A ban for actors from the financial sector to be directly or indirectly active in countries, which are included in the back lists as tax haven or money laundering country
EU-wide coordinated liability and penal provisions for beneficiaries and agents of illegal tax constructions
A ban of letterbox companies and other constructions, exceeding beyond the EU, which help to evade tax payments
Control on capital movement for transactions in and out of tax havens
Measures at European level to drive forward the development of a worldwide register, which records the beneficial owners and beneficiaries of all companies and other legal corporate bodies such as trusts and foundations.
The publication of a legislative proposal, which should provide whistleblowers who expose tax avoidance, tax evasion and money laundering practices with protection, has been planned for the coming months. Please use your legislative work to support the notion that people, who go public with such sensible documents, are comprehensively protected. Any prosecution or any other sanctions for whistleblowers, as occurred in the LuxLeaks case, must not be allowed to happen again.
For me, a clear stance against aggressive tax planning by multinationals and rich individuals, are also an important basis of decision-making for the next European Parliament elections. I would therefore like to ask you to take into consideration the above mentioned suggestions and points of criticism within the scope of the PANA Committee.