It is music to my ears. The finance ministers of the six largest EU countries Germany, France, United Kingdom, Italy, Poland and Spain held a memorable press conference in Dublin on Friday night. Their requests have been put forward by Attac and the Tax Justice Network since their establishment more than 10 years ago: Closure of tax havens, automatic exchange of information for all income from capital, an end to the abuse of banking secrecy for tax evasion and disclosure of the real beneficiaries of companies. I have given uncountable interviews, written articles and shown presentations campaigning for the subject, and now it has all become mainstream.
The Offshore leaks scandal and the political pressure which followed the one-sided burden sharing of the financial crises, was a wake-up-call, especially to German finance minister Schäuble who turned from a Saulus to Paulus. Just a few month ago, he pushed very hard for a tax agreement between Germany and Switzerland based on anonymous taxation of income from capital. He wanted this to become a general standard. Now, he stands at the forefront of a European FATCA agreement US-style, which would oblige all banks and financial service providers to automatically transfer tax relevant data to the home country of the foreign investor. The socialist-green opposition to the German-Swiss tax agreement has therefore paid off just as much as our long commitment in civil society against tax havens.
Watch the press conference of the meeting of the finance and economy ministers (Ecofin) and enjoy, as I did:
It is especially remarkable, that six finance ministers at once declare their commitment against aggressive tax avoidance by major corporations. The clear statement of British finance minister Osborne was a treat: Tax havens under the London influence such as the Channel Islands, too, will have to account for full transparency. Additionally, the instruments for the fight against money laundering will be tightened and applied for the fight against tax evasions.
This breakthrough does not mean however that we are done with the field of tax policy. Firstly, it is appropriate to watch suspiciously the small print and the implementation of the announcements. All ministers involved in the US as in Europe stood until recently on the other side of the debate around tax evasion and aggressive tax avoidance. At the press conference country-by-country reporting for all profits and tax payments for all large corporations was unfortunately not mentioned. Furthermore, there was no clear adherence to the common consolidated corporate tax base in the EU for transnational corporations, even though this proposal of the EU commission would effectively put an end to tax shifts between subsidiary companies. Equally, minimum tax rates and coordinated wealth levies remain a taboo.