The European Commission has unveiled an action plan to align tax rules across the European Union, and has published a blacklist of 30 tax havens in its continued effort to stamp out corporate tax evasion.
Wednesday’s announcement by tax commissioner Pierre Moscovici forms part of Europe’s response to evidence of widespread tax avoidance by multinational companies, as revealed by ICIJ’s Luxembourg Leaks investigation in November and December last year.
The action plan proposes to force companies to disclose profits and taxes paid on a country-by-country basis, and also revives a proposal for an EU-wide common corporate tax base in an attempt to wipe out profit shifting and sweetheart deals.
“We can no longer tolerate a situation where some companies pay close to nothing in taxes. It is not fair, because in the end, someone ends up carrying a heavier tax burden as a result,” Moscovici said.
The EU will also undertake public consultation through until September on how much tax information companies should be asked to publicly disclose as part of reporting requirements.
ICIJ’s LuxLeaks investigation uncovered the details of secret agreements between the Luxembourg tax authority and more than 300 global corporations that cut the effective tax rate for some of these companies to less than 1 percent.
In conjunction with the action plan, the Commission also released a new list of 30 “non-cooperative tax jurisdictions” based on the tax havens most-frequently cited by EU member states. The list includes jurisdictions like Hong Kong, Liechtenstein, the Cayman Islands, the British Virgin Islands, and more.
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