Sven Giegold

ECOFIN: EU tax havens block fight against tax avoidance

At today’s EU Economic and Financial Affairs Council (ECOFIN), the EU finance ministers postponed a decision on a second part of the anti-tax avoidance directive (ATAD2). The directive aims at tackling ‘hybrid mismatches’, arrangements used exploiting differences in tax treatment between two or more countries and used by large companies to make sure their profits remain untaxed. Moreover, finance ministers dealt with the extension of the European Fund for Strategic Investments (EFSI) and delayed once again a decision on the Financial Transaction Tax (FTT) among the ten countries that are working on the introduction of the tax. MEP Sven Giegold, financial and economic policy spokesperson of the Greens/EFA group commented on the disappointing outcome of the ECOFIN:

“An alliance of European tax havens lead by the Netherlands and the UK is blocking the implementation of stronger rules against tax avoidance. The Netherlands and the UK favour the interests of the financial sector and tax dodging companies over tax justice. Despite the vote of the Dutch parliament to implement the new anti-tax avoidance directive without additional delays by 2019, the government wants to allow harmful tax practices until 2024. Dijsselbloem is responding to the calls from American companies rather than pulling together with his European partners to fight tax avoidance. It is unacceptable that the UK wants a special treatment for the finance sector and that countries like Germany have not opposed that. Any new special treatment for the UK’s tax havens is totally unacceptable. The UK and the Netherlands seem to play a double game in the fight against tax avoidance. While they already agreed to the provisions of the anti-tax avoidance directive on the level of the G20, they are now obstructing the implementation on the EU level.

The EU countries try to make the EFSI run before it can walk. It is crucial to enhance investment, but the shortcomings of the EFSI must be fixed first. The European governments feed a deficient investment fund. The flaws of the EFSI are manifold: The EFSI supports unecological projects, which contradict the objectives of the Paris Agreement to tackle climate change. Therefore, the EFSI needs a clear adjustment towards sustainability. Moreover, the current design of the EFSI create strong windfall gains. This shortcoming must be abolished. Furthermore, the EFSI needs to provide much more comprehensive information with regard to the impact on jobs and economic development that can be expected from the supported projects.

Finance ministers missed the opportunity to bring back the financial transaction tax as a christmas gift to their citizens. It is disappointing that not even the spirit of Advent is able to move the finance ministers to agree on a fair tax on the financial industry. The rate of the tax would be little, but it’s positive impact on tax justice would be huge. The ten countries need to work hard in 2017 to finally introduce this utterly needed tax.”

Rubrik: Unkategorisiert, Wirtschaft & Währung

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