Sven Giegold is a Green MEP from Germany. He is also one of those who, with me, shares description as a co-founder of the Tax Justice Network, which he chaired for a number of years.
He's just highlighted a critical issue on his blog, which is very relevant in the light of Luxleaks and the Amazon news today:
It is still a scandal that only 9 civil servants of the Commission are in charge of investigating the tax deals of big corporations in Europe. In a broader sense 20 civil servants are involved in this work. The human resources of this unit must be increased urgently and drastically. This in turn also would pay off for all honest taxpayers.
I could not agree more. Indeed, I touched the same theme this morning.
The under-resourcing of tax investigation is not just a UK issue: it is an international one too.
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In the film ‘Inside Job’ about the 2008 crash, the american Securities & Exchange Commission (SEC) was similarly under resourced in the run up to that crash and had certainly not got a grip on the derivatives that brought the house down.
Other agencies were also prevented from the doing the right thing too.
Given that EU Commission president Junker was, in his previous incarnation as Luxemburg’s prime minister, seriously implicated in the ‘lux leaks’, one could reasonably argue that nine is nine too many.
One might also fairly observe that the court of auditors have plenty of scope dealing with the jiggery pokery within their remit before troubling with issues outwith their jurisdiction and competence.
One could reasonably argue that comment is fatuous gibberish based upon ill informed opinion intended to permit the continuation of abuse
Goodness, I should never have guessed that one might argue that. When the thought left me it seemed an altogether reasonable point of view.
The capacity of the right to convince themselves they are reasonable is quite staggering
It may go against your orthodoxy but it is hardly fatuous or a position that owes anything to the political right to contend:
a) that an organisation currently headed by a man whose previous track record in his home country appear to link him to the dubious activity which you decry AND
b) an organisation which moreover has no jurisdiction in policing international tax abuse by your definition or any other,
should not be employing functionaries at public expense to investigate matters outside the remit provided by treaties.
Or have all the treaties between Rome and Lisbon been superseded by the Treaty of Downham Market which I have failed to notice in a doubtless fatuous and right-wing fashion?
It may have escaped your notice that
A) I have done more than most to expose Juncker and Luxembourg
B) have called for him to go
C) have done more than most to end international tax abuse
What have you done but whinge on the sideline after the event?
And not notice that the institution and what it does may be bigger than anyone person in it?
As for the investigations: Juncker did not start them and two petition enquiries are at the core of the Union, like it or not
Might you like to get your facts right?
Ed note: comment deleted for being offensive
The EU rules on state aid have not changed materially recently. The Amazon ruling in Luxembourg was agreed in 2003; the Apple rulings in Ireland were granted in 1991!
If these rulings are illegal state aid, what have the EU competition authorities been doing for the last 20+ years?
Not realising they could use competition rules on this issue – no one did
Not realising tax competition is as harmful as it is – only a very few of us did
Most universities still teach it as a good thing
Not realising that selective tax measures were state aid?
Likely to be the case
Selective tax measures are a canonical example of state aid. The commission has been investigating them and the court has been ruling against them since at least the 1960s.
I think that 9 too many. I would far rather have dedicated staff within efficient national authorities that talk to each other.
I think that absurd
You think international coordination ion tax has no benefit?
That is the route to madness….and abuse
For the sake of balance, a reliable source (close member of my family), currently working on tax policy for the European Council (not the Commission), believes that this small number of civil servants must refer only to those working specifically on the competition policy cases referred to the Commission (like Amazon in Luxembourg) and thus represents only one small part of the picture.
He informs me that the European Commission has “two whole directorates on indirect and direct taxation policy, and the main policy objective these days is indeed the fight against tax fraud, evasion and avoidance”.
He also adds that “the UK has always been the Member State most fiercely opposed to giving more means for EU to deal with its new responsibilities so indeed we have sometimes to deal with limited administrative capacity…”
I would question that the main tax of the directorate on tax is to address tax fraud, evasion and avoidance
Directly they have no power to do so
Richard,
Clearly they have no power to enforce anything. But if they have no power to ‘address’ these important issues and hence to express opinions on them and make at least suggestions (if not formal recommendations), what is the point of their existence? Or are you suggesting that they are a waste of time and money? While no doubt a lot of Brits would agree with that, I would not have thought you’d be among them.
Sorry, but I’m bemused.
They can suggest
Competition Commussion can enforce
That’s the difference
Understood.
I guess our wires got crossed, your point being that the investigation by the Competition Commission is under-resourced.
I just thought it worth passing on to readers of your blog the separate, but not totally unrelated,information I received that the main focus of the tax directorate (these days) is the fight against tax fraud, evasion and avoidance, which you appeared to then say could not be the case. OK – it’s Sunday evening 😉
No problem
As mentioned above, this figure of 9 civil servants must refer to the service in the Directorate-General (DG) responsible for competition policy (COMP) dealing with such cases as Amazon or Starbucks, even though I’m not sure that such a ‘tax avoidance’ service exists in DG COMP since this DG is rather organised by policy themes: http://ec.europa.eu/dgs/competition/directory/organi_en.pdf
As for EU powers in this field, what is written above is wrong: the European Commission CAN propose actual legislation, and as a matter of fact there has been many and will continue to be more of such legislative proposals. However any decision in this field (taxation policy) requires unanimity of the 28 Member States. The most recent one being expected will be a legislative proposal (directive) mandating automatic exchange of information on tax rulings following the LuxLeaks scandal.
The legal basis for such policy actions can be found in EU treaties (articles 113, 115 TFEU notably): harmonisation in the field of tax policy is possible as long as such it is necessary to ensure the good functioning of the internal market and to avoid distortion of competition, which is the case with tax fraud/evasion/avoidance.
As regards the Commission DG responsible for this policy (DG TAXUD), you can find more information here: http://ec.europa.eu/taxation_customs/index_en.htm
And the organigramme is available here:
http://ec.europa.eu/taxation_customs/resources/documents/common/about/structure/organi_en.pdf
As for the comment that questions that the main task of the directorate on tax is to address tax fraud, evasion and avoidance, I would say that almost all main Commission legislative proposals recenlty under discussion are directly or indirectly linked to tax fraud, evasion and avoidance: revised savings taxation directive, revised Interest-Royalties Directive (IRD), revised Parent-Subsidiariy Directive (PSD), proposal for a Common Consolidated Coporate Tax Base (CCCTB), revised Directive on administrative cooperation (DAC) in the field of taxation, VAT treatment of vouchers, negotiations with third countries on savings taxation, business taxation, or VAT fraud, etc.
The main exceptions are the revised Energy taxation directive (mainly environmental motives), the proposal for a standard VAT return at EU level (mainly simplification motive), and the proposal for a financial transactions tax (FTT).