E.U. bill

Havens Delay Law on Secret Tax Deals

Jean-Claude Juncker Stefan Boness Ipon
Jean-Claude Juncker wants to see an end to secretive tax incentives.
  • Why it matters

    Why it matters

    A draft E.U. bill would force member states to automatically exchange information on tax rulings, helping to make corporate tax deals more transparent but potentially embarrassing some governments.

  • Facts

    Facts

    • Large global corporations often sign individual tax agreements with the governments of the countries they operate in.
    • The European Commission says such deals do “not always comply with general ethical and moral standards.”
    • Details of its draft bill on tax rulings are yet to be finalized with several countries asking for caveats.
  • Audio

    Audio

  • Pdf

Following months of criticism of corporate tax avoidance, European Commission President Jean-Claude Juncker last November openly admitted that preliminary tax agreements with companies did “not always comply with general ethical and moral standards.”

This, he argued, is why E.U. member states should in the future automatically notify each other about tax rulings. It was time to put an end to hidden tax benefits for companies, he added. But this is easier said than done.

A draft bill on the automatic exchange of information about tax rulings has been around since March. And all 28 E.U. countries insist that they intend to approve it by no later than the end of the year.

But, once again, the devil is in the details. Discussions over the minutiae of the draft legislation had hardly begun when opponents began speaking up.

Great Britain, in particular, is applying the brakes. The government in London doesn’t like the fact that information exchange is to be retroactive. All tax rulings agreed to with companies in the past ten years would be included, according to the draft bill.

Want to keep reading?

Subscribe now or log in to read our coverage of Europe’s leading economy.