European countries ‘still not preventing multinationals from tax dodging’

5 Nov 18

European governments are still making it too easy for multinational corporations to avoid paying corporation tax, campaigners have warned.

Although many political leaders spoke out against tax dodging after the Paradise Papers made headlines one year ago today, the problems that led to the scandal still remain “unaddressed”, the European Network on Debt and Development said.

Tove Maria Ryding, tax coordinator at Eurodad – a network of non-governmental organisations across Europe - said the world is still “far from the point where problems in our tax systems have been fixed”. Corporate tax avoidance is costing countries and estimated $500bn per year, according to Eurodad.

She added that despite the EU’s efforts to prevent wealthy individuals from hiding their wealth and evading tax, there has not been the same progress to make multinationals pay their share.

“Instead, EU governments have been deadlocked in internal disagreement, and there has been a lack of political will to move forward,” Ryding said.

“We know that this can help reduce corporate tax avoidance, but for a year EU member states have made no headway. They are meeting again at the end of this month, but it is not clear whether they will even put this issue on the agenda.”

She added that some EU countries continue to “behave like tax havens”, including Malta, Luxembourg, Ireland and the Netherlands.

Last November, NGOs also warned that these EU member states all met the criteria for being listed as a tax haven on the EU’s own black list.

This week, the Global Alliance for Tax Justice marked the one year anniversary of the Paradise Papers scandal with global ‘Days of Action to Make Multinationals Pay Their Share of Tax’.

The leak of the financial documents last year exposed extensive global tax abuses by wealthy individuals and corporations in 19 tax jurisdictions.

At the time of the scandal, Transparency International said governments should make changes to rules, such as keeping public registers of the real owners of companies. The UK government has since backed plans to introduce such a register and has called on other countries to follow its lead.

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