EU closes another tax loophole
The EU finance ministers are continuing their crackdown on tax avoidance, resolving on Tuesday that multinational companies may no longer exploit differences between the tax systems of the EU and third countries. Instead, as of 2020 multinationals will have to pay their taxes in the countries where they earn their profits. Commentators welcome the move, although some fear it may hurt the EU's competitiveness.
Even gentle pressure can be effective
The EU's battle against tax avoidance and tax evasion is crucial for its credibility and certainly worthwhile, Delo explains:
“Certain steps have already been taken: the multinationals' tax deals with EU member states are becoming more transparent. The tax haven blacklist will be the next test of how serious the EU politicians are about this initiative. … It may be that many countries are able to avoid being pilloried by taking purely cosmetic measures. On the other hand gentle measures can also be effective if countries that serve as havens are exposed to harsh criticism, prompting them to start changing their taxation models on their own initiative. This, however, raises the question of why this step is only being taken now instead of much sooner.”
Fighting on the front line is a risk
For La Vanguardia the agreement is a double-edged sword:
“This is an important initiative because normally it's very difficult to reach decisions on tax issues, as they have to be passed unanimously. … The Maltese Finance Minister Edward Scicluna, whose country holds the EU presidency this semester, has stressed that the EU's top priority is to fight corruption. The risk here is that the European states end up at a competitive disadvantage against other economic blocs or even the UK once it leaves.”