The EU has announced today that it will be launching a new package on tax transparency next month. They say:
The European Commission today launched its work on its ambitious agenda to combat tax avoidance and aggressive tax planning. The College of Commissioners held a first orientation debate on possible key actions to ensure a fairer and more transparent approach to taxation in the EU.
President Jean-Claude Juncker has made the fight against tax evasion and avoidance a top political priority of this Commission, and today's discussion centred on the most pressing measures that need to be taken in this field.
It was agreed that a key objective is to ensure that companies are taxed where their economic activities generating the profits are performed and cannot avoid paying their fair share through aggressive tax planning. In this respect, there was strong consensus in the College that a particular focus must be on improving tax transparency in the area of corporate taxation. To this end, the College of Commissioners agreed to present a Tax Transparency Package in March.
Apparently Vice-President Valdis Dombrovskis, responsible for the Euro and Social Dialogue said:
A prosperous Europe needs fair, transparent and predictable tax systems for businesses to invest and for consumers to regain confidence. As part of our work for a deeper and fairer internal market, we want to establish greater tax transparency and ensure fairer tax competition, within the EU and globally. It is not acceptable that tax authorities have to rely on leaks before they enforce tax rules.
Pierre Moscovici, Commissioner for Economic and Financial Affairs, Taxation and Customs, added:
Abusive tax practices and harmful tax regimes breed in the shadows; transparency and co-operation are their natural foes. It is time for a new era of openness between tax administrations, a new age of solidarity between governments to ensure fair taxation for all. The Commission is fully committed to securing the highest level of tax transparency in Europe.
But what's actually going to happen? Well it seems that all this talk simply relates to the the Commission's promise made last December to propose legislation to extend the automatic exchange of information on tax rulings.
Although there may be something more to follow. They say:
The March proposal will be accompanied by a wider set of measures to increase tax transparency; today's orientation debate considered various legislative and non-legislative options.
But let's be clear what is not on the agenda, and that seems to be public, on the record country-by-country reporting by the companies that might be abusing. In that case all this talk is just waffle. What we know now is that the companies will do nothing until they are forced to be accountable for what they do under the focus of public opinion and the media.
Ineffective tax authorities, already captured in too many places by the financial services industry, as HMRC has been in the UK, are no threat to these companies. It is publicity that forces action.
Country-by-country reporting could deliver that publicity. Nothing else. The EU is not talking about delivering it. In that case let's be quite clear about their commitment to tax transparency: it is completely non-existent. Whatever else they say, there's only one measure for action that can convince people now - and that is requiring that companies open their books.
That's not happening. I'd expect nothing else from President Juncker.