Chicago - Jun. 11, 2021
Music TV Politics Sports Books People Places & Things
 
Beachwood Politics
Our monthly archive.
Who We Are
Chicago by the numbers.
Sausage Links
Wiki Daley
Wiki Rahm
Illinois Channel
CAN TV
Ralph Martire
Doonesbury
Government Attic
Division Street
Indie Political Report
The Obameter
ProPublica
The Intercept
SCOTUS Blog
American Dream Betrayed

European Plan To Unify Corporate Tax Rules And Recoup Billions Faces Steep Hurdles

The European Commission proposed this week to revamp the bloc's tax system and introduce a single corporate taxation rulebook that would stop European governments from competing with each other to attract business investments by lowering tax rates.

The new proposal, the third the commission has put forward in the past 10 years, called for a unified way to tax corporations where they generate income rather than where they set up their headquarters - which is often in a low tax rate jurisdiction.

"Our tax rules should support an inclusive recovery, be transparent and close the door on tax avoidance," trade commissioner Valdis Dombrovskis said in a statement.

Irene Tenagli, chair of the European Parliament's Economic and Monetary Affairs Committee, welcomed the proposal as a way to support the recovery of the bloc's economy which has been affected by the COVID-19 pandemic.

"We cannot properly support recovery with a system that allows hundreds of billions euros in potential tax revenues to be lost because of evasion and fraud," she said at a press event.

But some tax justice advocates and observers remain skeptical about the scope of the proposal and its chances of being approved by all member states, a key requirement.

"The big question for us is whether the European Commission is ready to take bold and ambitious action to stop large-scale corporate tax avoidance," said Tove Maria Ryding, tax policy and advocacy manager at the European Network on Debt and Development, a group of more than 50 civil society organizations.

Known as "Business in Europe: Framework for Income Taxation," or BEFIT, the proposal will be finalized by 2023. It also includes a plan to increase authorities' oversight of shell companies to stop tax avoidance and evasion.

Each year, Europe loses between $40 billion and $85 billion in corporate tax avoidance, according to estimates cited by the commission. And some of the jurisdictions that aggressively attract multinationals with sweetheart deals and very low tax rates are in the heart of Europe.

"The commission is in a tight spot due to the fact that EU decisions on tax require unanimity, and several of the EU member states, such as Luxembourg and Ireland, continue to behave as tax havens," Ryding said.

In the 2017 Paradise Papers investigation, the International Consortium of Investigative Journalists reported how Apple was able to channel up to two-thirds of its global profits into subsidiary companies, registered in Ireland, that paid almost no tax.

Most recently, the news organization Investigate Europe found that, despite reporting high profits during the COVID-19 pandemic, Amazon's 2020 balance sheet for its Luxembourg-based umbrella company, which covers its European business, showed a loss of more than $1 billion. This allowed the company to obtain tax benefits, the report said.

The 2014 ICIJ investigation Lux Leaks highlighted some of the strategies many corporations use to drastically cut their tax bills.

The commission's move follows an initiative by the Organization for Economic Co-operation and Development that, if approved, will set a minimum rate for multinational companies around the world.

Earlier this year, the U.S. proposed setting a global 21% minimum tax rate for corporations. The finance ministers of France, Germany and other EU countries said they back the plan. The U.K. doesn't, according to the Guardian.

The commission's proposed reform wouldn't touch individual countries' corporate tax rates. Companies' profits and losses from their European activity would be added up and the net profit would then be distributed to individual countries.

However, the commission's political role may make the tax reform efforts fraught and risk alienating some European member states, according to Rasmus Corlin Christensen, a researcher at the Copenhagen Business School and the author of a study about the EU's role in international tax policy

"By insisting on implementation via directive, the commission risks empowering EU tax havens in resisting, at the EU level, a global minimum tax agreement which they couldn't resist at the OECD/G20 level," Christensen said.

While acknowledging such challenges, commission officials told Politico that the proposed European tax agenda may have more chances to go forward if OECD countries agree on the global tax deal, which is expected by mid 2021.

-

See also from ICIJ:

* Wealthy Countries That Set Global Tax Rules Are Biggest Enablers Of Corporate Tax Abuse, Report Finds.

* Multinationals Shifted $1 Trillion Offshore, Stripping Countries of Billions In Tax Revenues, Study Says.

-

Previously in tax scammage:

* McDonald's Breaks Promise To Raise Wages.

* Last Year, Amazon Paid No Federal Income Taxes. Now, It's Trying To Kill A Local Tax That Aims To Help the Homeless.

* Trump Vowed To Punish Companies That Moved Jobs Overseas. Is Congress Rewarding Them?

* After Long Career Bailing Out Big Banks, Obama Treasury Secretary Tim Geithner Now Runs Predatory Firm That Exploits The Poor For Profit.

* Jeff Bezos Just Became The Richest Person Ever. Amazon Workers Just Marked #PrimeDay With Strikes Against Low Pay And Brutal Conditions.

* A Sweet New Century For America's Most Privileged.

* With Nation Transfixed By Kavanaugh Monstrosity, House GOP Votes To Give Rich Another $3 Trillion In Tax Cuts.

* Deepwater Horizon Settlement Comes With $5.35 Billion Tax Windfall.

* Offshoring By 29 Companies Costs Illinois $1.2 Billion Annually.

* Government Agencies Allow Corporations To Write Off Billions In Federal Settlements.

* The Gang Of 62 Vs. The World.

* How The Maker Of TurboTax Fought Free, Simple Tax Filing.

* $1.4 Trillion: Oxfam Exposes The Great Offshore Tax Scam Of U.S. Companies.

* How Barclay's Turned A $10 Billion Profit Into A Tax Loss.

* Wall Street Stock Loans Drain $1 Billion A Year From German Taxpayers.

* German Finance Minister Cries Foul Over Tax Avoidance Deals.

* Prosecutor Targets Commerzbank For Deals That Dodge German Taxes.

* A Schlupfloch Here, A Schlupfloch There. Now It's Real Money.

* How Milwaukee Landlords Avoid Taxes.

* Study: 32 Illinois Fortune 500 Companies Holding At Least $147 Billion Offshore.

* Watch Out For The Coming Tax Break Trickery.

* When A 'Tax Bonanza' Is Actually A Huge Corporate Tax Break.

* The Hypocrisy Of Corporate Welfare: It's Bigger Than Trump.

* Oxfam Names World's Worst Tax Havens Fueling 'Global Race To Bottom.'

* Offshore Tax Havens Cost Average Illinois Small Business $5,789 A Year.

* State Tax Incentives To Corporations Don't Work.

* GOP Tax Plan Would Give 15 Of America's Largest Corporations A $236 Billion Tax Cut.

* Triumph Of The Oligarchs.

* Amazon Short-List Proves Something "Deeply Wrong" With America's Race-To-The-Bottom Economy.

* Apple's $38 Billion Tax Payment Less Than Half Of $79 Billion They Owe.

* U.S. Surpasses Cayman Islands To Become Second-Largest Tax Haven On Earth.

* Less Than Year After GOP Tax Scam, Six Biggest Banks Already Raked In $9 Billion In Extra Profits.

* After Budget Cuts, The IRS's Work Against Tax Cheats Is Facing "Collapse."

* $6.5 Billion: A Low-Ball Estimate Of The Walton Family's Haul After 16 Years Of Bush, Obama And Trump Tax Giveaways.

* Illinois Could Recover $1.3 Billion Lost To Corporate Tax Loopholes.

* Whatever You Paid To Watch Netflix Last Month Was More Than It Paid In Income Taxes All Last Year: $0.

* Number Of U.S. Corporations Paying 'Not A Dime' In Federal Taxes Doubled In 2018.

* It's Getting Worse: The IRS Now Audits Poor Americans At About The Same Rate As The Top 1%.

* IRS: Sorry, But It's Just Easier And Cheaper To Audit The Poor.

* Corporate America's Tax Breaks Have Left Society More Vulnerable To Pandemic.

* Another Tax Loophole That's Making The Rich Even Richer.

-

Previously in The Paradise Papers:

* 'Paradise Papers' Reveal Tax Avoidance, Shady Dealings Of World's Rich And Powerful.

* Just How Much Money Is Held Offshore? Hint: A SHIT-TON.

* Development Dreams Lost In The Offshore World.

* Keeping Offshore 'Hush Hush,' But Why?

* Tax Havens Are Alive With The Sound Of Music.

* Today In Tax Avoidance Of The Ultra-Wealthy.

* Go To Town With This Offshore Leaks Database.

* The Paradise Papers: The View From Africa And Asia.

* The Paradise Papers: The End Of Elusion For PokerStars.

* The Paradise Papers: An Odd Call From The Bermuda Government.

* The Paradise Papers: Nevis Is An Offshore Haven Of Opportunity

* The Paradise Papers: The Long Twilight Struggle Against Offshore Secrecy.

* The Paradise Papers: A Fair Tax System Will Be Lost Without Public Pressure.

* Item: Today In The Paradise Papers: Through Death Threats And Scare Tactics, Honduran Reporter 'Perseveres.'

* The Paradise Papers: Journalists Flee Venezuela To Publish Investigation.

* Last Stop: Chicago.

* The Paradise Papers: 'Africa's Satellite' Avoided Millions Using A Very African Tax Scheme.

-

Previously in The Panama Papers:

* The Panama Papers: Remarkable Global Media Collaboration Cracks Walls Of Offshore Tax Haven Secrecy.

* The Panama Papers: Prosecutors Open Probes.

* The [Monday] Papers.

* Adventures In Tax Avoidance.

* Mossack Fonseca's Oligarchs, Dictators And Corrupt White-Collar Businessmen.

* Jonathan Pie, TV Reporter! They're All In It Together.

* Meet The Panama Papers Editor Who Handled 376 Reporters In 80 Countries.

* The Laundromat.

'A widow (Meryl Streep) investigates an insurance fraud, chasing leads to a pair of Panama City law partners (Gary Oldman and Antonio Banderas) exploiting the world's financial system. Steven Soderbergh directs.'

-

Previously in carried interest, aka The Billionaire's Loophole:

* Patriotic Millionaires Vs. Carried Interest.

* The Somewhat Surreal Politics Of A Private Equity Tax Loophole Costing Us Billions (That Obama Refused To Close Despite Pledging To Do So).

* Fact-Checking Trump & Clinton On The Billionaire's Tax Break.

* Despite Trump Campaign Promise, Billionaires' Tax Loophole Survives Again.

* Carried Interest Reform Is a Sham.

-

Comments welcome.



Permalink

Posted on May 27, 2021


MUSIC - Riding Illinois' Storm Out.
TV - How White Republicans See BLM.
POLITICS - Car Wash Workers Finally Win.
SPORTS - Cubs Screwing FO - And Themselves.

BOOKS - How Comics Make Sounds.

PEOPLE PLACES & THINGS - Illinois Caverns Reopening After 10 Years.


Search The Beachwood Reporter

Subscribe To Our Newsletter
Email:

Follow BeachwoodReport on Twitter



Beachwood Radio!