Sven Giegold

Tax evasion/Luxembourg leaks – Blow to Juncker’s credibility must spur real EU action against tax avoidance and dumping

Commenting on the ‘Luxembourg Leaks’ revelations on the state of Luxembourg’s role in facilitating large scale tax evasion by the international consortium of investigative journalists (ICIJ), Green economic and financial policy spokesman Sven Giegold said:

“These revelations are a major blow to the credibility of new commission president Junker and his capacity to act for the public interest. There has never been such concrete evidence of the extent multinational corporations go to avoid their tax responsibility but also the role of state actors in facilitating this. The fact that EU commission president Juncker served as Luxembourg’s finance and prime minister throughout this period makes him directly complicit in this mass corporate tax avoidance.

“This must however be a watershed moment to galvanise the fight against tax evasion and dumping in Europe and beyond. The Commission must now set out a comprehensive action plan against tax dumping. Only by doing so can Juncker begin the path to redemption and try and dispel the doubts about his conflict of interest as Commission president.

“EU finance ministers meeting tomorrow must immediately respond to these serious revelations. There is a need for an alliance of member states that want to truly combat tax dumping in the EU and reticent member states, who have been complicit in these schemes (like Austria, Ireland, Luxembourg and the Netherlands), must end their resistance. Clear and concrete measures to this end are already in the pipeline. We finally need agreement on implementing a binding Common Consolidated Corporate Tax Base (CCCTB). This should be accompanied by proposals for a European minimum corporate tax rate. The German government must also stop blocking mandatory rules on tax transparency, via country-by-country reporting.

“The EU’s most effective means to prevent aggressive tax avoidance is via competition policy, as action in this area cannot be blocked by a single member state (as with taxation policy). New EU competition commissioner Vestager must give top priority to combating tax dumping. This means both allocating sufficient resources within the Commission and using EU state aid rules to their full potential to crack down on tax dumping.”

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