The FT has reported tonight that:
Brussels is probing Ireland, Luxembourg and the Netherlands over their tax deals with multinationals paving the way potentially for a formal investigation into illegal sweeteners.
Europe's top competition authority has asked the governments to explain their system of tax rulings and give details of assurances given to several specific companies — including Apple and Starbucks — according to people who have seen the request.
The move threatens to open a new front in the global clampdown on tax evasion through enforcing the EU's state aid rules — a unique regime that bans serious distortions of competition through tax breaks to favoured private groups.
If this is true - and the report implies good sources are available - this is excellent news because it goes right to the heart of the issue of tax abuse - which is that it is state sponsored by those states that have fallen prey to the influence of what Prem Sikka calls the pinstripe mafia of lawyers, accountants and bankers.
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How effective will they be though at dealing with Corporate Welfare? I know it’s cynical but I can’t help but believe this is more smoke and mirrors!
Actually, the EU has quite a good track record in reining in investment incentives, with transparency, binding aid maxima for every region, and a reduction of those maxima for projects larger than euro 50 million. I have written about this extensively.
Absolutely right
The Code of Conduct, amongst other things, has been effective
As someone who follows the EU quite closely, a prediction on the outcome of any investigation:
Nothing
Alas…….
It was precisely a complaint such as this which forced Ireland to raise its corporate income tax rate from 10% to 12.5%.
Agreed