The Commission unsuccessfully pretends to want curbing of tax evasion

Press confeence by Algirdas Šemeta, Member of the European Commission in charge of Taxation, Customs, Statistics, Audit and Anti-Fraud on the adoption by the EC of a proposal to amend the Parent-Subsidiary Directive. (EC Audiovisual Services 25/11/2013).

Press confeence by Algirdas Šemeta, Member of the European Commission in charge of Taxation, Customs, Statistics, Audit and Anti-Fraud on the adoption by the EC of a proposal to amend the Parent-Subsidiary Directive. (EC Audiovisual Services 25/11/2013).

The European Commission, after having facilitated for decades the tax avoidance and evasion practices of multinationals with the ‘Parent-Subsidiary Directive’, yesterday decided to just reduce the size of the extra-large loop holes the big multinationals use for years to avoid and evade taxation. With a Press release issued yesterday, the Commission almost recognised that it has paid a huge service to the big business in helping them avoid and evade taxation.

The release says, “In particular, companies will no longer (with it proposed amendments) be able to exploit differences in the way intra-group payments are taxed across the EU to avoid paying any tax at all. The result will be that the Parent-Subsidiary Directive can continue to ensure a level-playing field for honest businesses in the Single Market without opening opportunities for aggressive tax planning”.

Facilitating tax evasion

It’s quite preposterous though that the Commission tries to fool the public opinion by pretending to really want to curb the tax evasion of multinationals. As if everybody else are morons, not knowing that this Directive shamelessly facilitates the tax evasion schemes of multinationals, through hybrid loan arrangements and dividend payments. From its birth this Directive was ‘conceived’ to help multinationals avoid double taxation, at a time that they already didn’t pay any taxes. The Commission just wanted to be sure that the multinationals were doubly secured from the taxman.

It’s the Commission itself admitting that. The Press release quite openly says that the big companies ‘used’ the Directive and “the result is that the payments from the subsidiary to the parent company is not taxed anywhere”. A few lines below, the Commission also accepts that the new amendment of the Directive, “will stop cross-border companies from planning their intra-group payments to enjoy double non-taxation”.

It’s obvious then, that yesterday’s decision to amend the ‘Parent-Subsidiary Directive’ is not a result of genuine interest of the Commission to stop multinationals, from stealing the taxes of poor working people who pay theirs to the last cent, plus social security. The issue has attracted the interest of the wider public, despite the self-imposed censorship in the main stream media, due to their dependence on the advertisement budgets of the big multinationals.

Public opinion outrage

On top of that, things seem to change in the international environment around the political confrontation of the totally open and direct tax thefts of multinationals. In Britain, a public opinion outrage forced the Cameron government to place this subject a bit higher on the agenda. The same is true for the US. In the European Union it seems that the next May election is the catalyst of this Commission decision.

The majority of legislators are now accusing the Commission of doing nothing to facilitate their job. Fraudulent bankers, tax evaders and arms dealers are all free to continue their trades. However, it seems that the fear the next European Parliament may be filled with anti-EU and fascist MEPs, must have terrified the Commission. This must have been the motive of this Commission decision, to slightly narrow the tax evasion and avoidance loopholes used by multinationals or at least to show it is doing something like that.

A show off of strictness

An extra proof that the Commission is not serious while speaking about curbing tax evasion and avoidance, is that it never touched the tax avoidance highway of inter-business transfer pricing, despite the fact that many EU countries have introduced relevant legislation. There exists a Transfer Pricing Forum, an expert group, created by the European Commission in 2002. Once more this Commission ‘creature’ was not conceived to curb tax evasion. On the contrary, it was created to facilitate it. The Commission itself says so, “it facilitates transfer pricing, in order to reduce the high compliance costs and to avoid (or facilitate the elimination of) double taxation that easily arises in the case of cross-border inter-group transactions”. All that at a time, when multinationals manage not only to avoid taxation, but instead are asking for, and actually receive hefty ‘incentives’ in order to build factories in a certain region or a country.

The ways of the multinationals in avoiding and evading taxation are many. Think of the tax deductible royalty payments from one interrelated firm to another, or when paying for the license of a trademark or a patented technology. Then think of the payments for intangibles between imperceptibly related companies.

Really, there is no end to tax evasion and avoidance practices in use by big business. The gains are so huge that this activity attracts not only the best professionals, but it’s the ‘raison d’être’ of entire countries and regions even within the European Union. The conclusion is that Commission cannot fool anybody.

 

the sting Milestone

Featured Stings

Can we feed everyone without unleashing disaster? Read on

These campaigners want to give a quarter of the UK back to nature

How to build a more resilient and inclusive global system

Stopping antimicrobial resistance would cost just USD 2 per person a year

2018 Golden Pen of Freedom Awarded to Maria Ressa of the Philippines

This is how the world can get routine vaccinations back on track

Mobile Technology Saving Lives: Changing healthcare systems with simple technological solutions

These four countries are the happiest in the European Union

‘Power is not given, power is taken’, UN chief tells women activists, urging push-back against status quo

Where do Americans stand on immigration? They’re not as divided as you might think

FROM THE FIELD: One teen’s journey from refugee camp to US school principal

UN’s Guterres condemns ongoing airstrikes on Syria’s hospitals, medical workers

Mental health in times of a pandemic: what can each individual do to lessen the burden?

Parliament backs a modernised EU electoral law

A Sting Exclusive: “Paris is indeed our best bet for a secure climate future”, EU Commissioner for Environment Karmenu Vella cries out from Brussels

Making the most of our ‘extra time’ – for ourselves and society

This is the state of the world’s health, in numbers

Privatisation and public health: a question of Human Rights

Germany: A grand coalition may trouble employers and bankers

Sustainable investment is on the rise – here’s how to connect the dots

State aid: Commission approves €6 billion German measure to recapitalise Lufthansa

NASA has released new photos of the Apollo 11 moon landing

The European Parliament wants to stay in one place

Coronavirus could trigger a hunger pandemic – unless urgent action is taken

Where are the world’s nuclear weapons?

The world must pull together to stem the urgent crisis in our ocean

The COP24 Agreement: Yes, it happened at last

Afghanistan: UN ‘unequivocally condemns’ attack in Kabul

From Sweden to India, School climate strikes have gone global

The world has made spectacular progress in every measure of well-being. So why does almost no one know about it?

‘Leaders who sanction hate speech’ encourage citizens to do likewise, UN communications chief tells Holocaust remembrance event

‘Education transforms lives’ says UN chief on first-ever International Day

Lessons from dealing with the collapse of Lehman Brothers

Towards a seamless internal EU market for industrial goods

State aid: Commission approves €133 million Portuguese liquidity support to SATA airline; opens investigation into other public support measures

Do doctors need to know their patients’ sexual orientation and gender identity?

EU Parliament and Council: Close to agreement on the bank resolution mechanism

The unique frequency of felling the gab on women’s rights by medical students

Taking care in times of social isolation goes beyond washing hands or wearing masks

Venezuelans brave torrential border river, face exploitation, abuse – UN urges greater protection

China dazzles the world with her Silk Road plan to connect, Asia, Europe and Africa

Phone lines open between Ethiopia and Eritrea, and people are calling strangers

3 trends that will transform the energy industry

UN chief ‘deeply saddened’ by Ethiopia plane crash which killed 157, including at least 21 UN workers

Why are so few women buying into Bitcoin?

Germany may prove right rejecting Commission’s bank resolution scheme

UN calls for action to tackle ‘ubiquitous but invisible’ global road safety crisis

Future-proofing the European banking market – removing the obstacles to exit

GSMA Announces First Keynote Speakers for 2019 “MWC Los Angeles, in Partnership with CTIA”

UN launches drive to highlight environmental cost of staying fashionable

The EU Commission vies to screen Chinese investment in Europe

These 11 EU states already meet their 2020 renewable energy targets

In Marrakech, UN chief urges world leaders to ‘breathe life’ into historic global migration pact

UN expert ‘shocked’ by Egyptian reprisals against human rights defenders she met

Decent working conditions for the young health workforce: what are the challenges and can we find solutions?

LGBTQ+: The invisible poor on our healthcare

Commission announces actions to make Europe’s raw materials supply more secure and sustainable

These Asian economies invested in their people – and it paid off

How AI can inspire doctors to be more inventive

Russia won’t let Ukraine drift westwards in one piece

Latin America and Caribbean region deadliest for journalists in 2019

MWC 2016 LIVE: Ford trumpets new in-vehicle system, “fundamentally rethinks” transportation

These countries create most of the world’s CO2 emissions

National parks give a $6 trillion boost to mental health worldwide

More Stings?

Advertising

Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s