MEPs demand for cracking down on EU tax havens

They say public country-by-country reporting should be introduced urgently

Photo: EP Paolo Gentiloni.

In their debate on the OpenLux investigations with the Commission and the Council Presidency, MEPs pointed out the need for enforcement of existing rules and called for straightway introduction of country-by-country reporting. 

In February, a huge journalist investigation revealed 55.000 offshore companies with assets of over €6tn, held by multinational companies in the Luxembourg’s financial ecosystem, showing the large scale of tax avoidance.

MEPs voiced their dissatisfaction that once again they have to discuss outrageous drains of tax revenues, when during the pandemic national governments are struggling to tackle revenue needs.

Many deputies said that legislation that has been held back by Member States for many years, such as that on public country-by-country reporting, cannot be delayed any further.

A number of them also pointed out that the solution lies not only with enacting new legislation but also ensuring that rules which already exist are properly enforced. The need of ending the exceptions from money laundering and transparency rules for NGOs was also mentioned.     

Thanks to OpenLux, we know more than before on issues concerning the implementation of anti-money laundering rules and transparency of beneficial ownership information, on the use of aggressive tax planning strategies, and on the existence of companies with no or very little economic substance, the so-called shell companies, Paolo Gentiloni, EU Commissioner for Economy, told MEPs.

Saying that EU solutions is necessary as problems like OpenLux have no borders, he explained that after the Fifth Anti-Money Laundering Directive, which enabled the OpenLux investigation, a step forward in transparency will be achieved soon with the interconnection of a system of national registers. It will allow national competent authorities to have direct access to information held by the national registers of the other Member States.

Other very important steps have been achieved, thanks to the two anti-tax avoidance directives and the DAC 6 on the mandatory disclosure of potentially aggressive cross-border tax arrangements. As a result, the EU today has a legislative framework in place that makes it the frontrunner on standards of transparency and anti-avoidance rules, compared to other global players, Commissioner Gentiloni stressed.

 He also said that a decisive step up is needed to ensure more effective EU-wide compliance with the principle of progressive tax that would support redistribution and reduction of inequalities among the economies. Improvements are necessary to the EU list of non-cooperative jurisdictions.

“We have to make sure that all the rules we have adopted at the EU level are effectively enforced by all Member States and we need to constantly work to further strengthen our legal tools to curb illicit behaviours,” the Commissioner for Economy underscored.

According to him, OpenLux investigation revealed that a large number of companies have failed to meet their reporting obligations. "This is a matter of monitoring and it is not acceptable, neither in the case of Luxembourg nor or any other EU Member States," he also said.

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