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3/21/15

EU unveils draft laws to end secret sweet tax deals

Tax Evasion
The European Union plans to oblige member countries to share details of tax agreements made with big companies and end the practice of sweet deals made in secret.

The EU’s executive commission unveiled yesterday draft laws that would require countries “to automatically exchange information on their tax rulings” every three months.

EU countries rarely share information about their tax decisions and are often unaware of rulings made by their partners, which creates a gap that some multinationals exploit.

The EU’s top economic and finance chief, Pierre Moscovici, said: “It’s high time to re-establish a tax balance and for companies to pay what they owe.”

The move comes after the so-called LuxLeaks allegations about sweet deals for multinationals with offices in Luxembourg. In February, the EU set up a special committee to look into national tax rules following the revelations.

The commission, which polices EU laws and drafts new legislation, also opened tax investigations last year into Apple in Ireland, Starbucks in the Netherlands and Amazon in Luxemburg. It is also looking into tax provisions in Belgium.

The commission believes that many multinational corporations are taking advantage by shifting profits between countries and that this deprives EU governments of tax revenues.

Tax rulings are the confirmation or assurance that authorities give to taxpayers on how their taxes will be calculated.

The new legislation would force national tax authorities to send a short report about all cross-border tax rulings they have issued.

Read more: EU unveils draft laws to end secret sweet tax deals | Shanghai Daily

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