I thank Dr Alf for reblogging the FT article entitled Brussels probes multinationals’ tax deals. Here are my own views.
The European Commission is a failed institution with a deep and enduring financial problem which it continues not to address.
That problem is that apart from Germany, the rest of the EU is in financial difficulty due to lack of exports, lack of productivity, lack of competitiveness and awful productivity.
The shortfall is $6 trillion USD, yet the proposed measures only amount to $1.6 trillion USD.
Raising taxes is the way that the Eurocrat apparatchiks see as the way forward, yet already their own legal advice has told them that a Financial Transaction tax is illegal.
Having been cut off at the pass, the European Commission now wants to get more money out of multinationals by raising corporation taxes on multinationals.
Advice I’ve been given privately by an expert in the area of tax avoidance and financial discovery in Suffolk last week tells me that many of the current tax havens will within the next 3 to 4 years adopt greater transparency as far as corporations go. This will in theory make it easier for the Commission to tax multinationals more heavily. The reality is however, somewhat different.
As one tax haven becomes “more transparent”, another will spring up in its place, and if one goes to the Dublin Financial district as I did in the Summer one can see swathes of American companies plus State Street and BT basing themselves and major operations there.
Because the Irish Government has secretly agreed to charge just 3% corporation tax versus the 23% charged in the UK and the much higher rates levied elsewhere.
State Street is the fund manager responsible for managing all the monies in the UK Government‘s “Auto Enrolled” pension scheme, so it has chosen to base itself in Dublin rather than London with the knowledge of both David Cameron and the Chancellor whose silence on the matter is as deafening as their rhetoric on tax avoidance by everyone else is very loud indeed.
The best way for the European Commission to get more taxes out of multinationals is for them to lower taxes so that it is more expedient for the multinationals to pay the taxes and keep employment in Europe than it is to employ armies of tax avoidance specialists, hide the money offshore in tax havens, not invest and outsource /offshore the work to low-cost countries wherever possible.
- Kenny defends tax regime as Brussels confirms inquiry (irishtimes.com)
- Brussels opens investigation into Ireland’s multinational tax deals (irishtimes.com)
- Bank of America Merrill Lynch intern Moritz Erhardt died after overworking – Case for EU regulation? (dralfoldman.com)
- European Commission to probe Republic’s ‘sweetheart’ US taxes (belfasttelegraph.co.uk)
- EU finance ministers to put Irish corporate tax regime in the spotlight (irishtimes.com)
- Some thoughts on the UK, Empire and geopolitical reality – John Gelmini (dralfoldman.com)
- China to join global clampdown on tax evasion (wantchinatimes.com)
- What European political leaders, especially in UK, should learn from Angela Merkel – John Gelmini (dralfoldman.com)
- EU launches probe into our ‘sweetheart tax deals’ for US firms (independent.ie)