Sun | Aug 19, 2018

EU launches tax evasion drive, plans on new rules next month

Published:Thursday | February 19, 2015 | 12:00 AM


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 yesterday 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 favouring big firms.

The Commission, which polices state aid rules, launched an investigation on February 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 Luxembourg.

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.