Bosses have criticised a plan by the European Union aimed at cracking down on cross-border tax avoidance within the bloc.
The European Commission, the EU’s executive arm, says companies that operate in more than one EU country tend to pay less tax because they can shift their profits around to low-tax jurisdictions.
To fight this, they propose to harmonise some tax regulations across the bloc so that it is more obvious where money is actually owed by companies.
“The rules that govern corporate taxation in the EU today are out-of-step with the modern economy. Uncoordinated national measures are being exploited by some companies to escape taxation in the EU,” the Commission said in a statement.
“This leads to significant revenue losses for Member States, a heavier tax burden for citizens and competitive distortions for businesses that pay their share.”
The plan does not propose actually harmonising corporate tax rates but instead closing loopholes and stricter rules on tax havens.
The Commission says the current corporate tax rules in the EU date from the 1930s and that a company operating across borders in the EU pays on average 30 per cent less tax than a company operating in only one.
In pictures: Extremists in the EU
In pictures: Extremists in the EU
1/6 France: Marine le Pen
Marine Le Pen, 45, took over the Front National (FN), the party that her father founded, in 2011. He himself described her as “a big, healthy, blonde girl, an ideal physical specimen." She claims to have cleaned up the FN and succeeded in pushing her anti-European, anti-euro and anti-immigration agenda into the EU political mainstream
2/6 Germany: Udo Voigt
He will be the first German neo-Nazi to enter the European Parliament. The former army officer, born in 1952, was jailed in 1995 for inciting racial hatred. Formerly the leader of the far right National Democratic Party (NPD), Voigt was convicted in 2009 after he was caught handing out flyers at the World Cup which argued that a black player was not entitled to play for Germany, whose national team – the literature argued – should be made up only of white players.
3/6 Denmark: Morten Messerschmidt
Leader of the Danish People’s Party, which won 27 per cent of the vote. His party has rammed 20 laws relating to immigrants and asylum-seekers through the Danish parliament, giving it the most anti-foreigner legislation in Europe. His party calls Islam “a fascist ideology” and rails against “East European criminal gangs”. One party strategist said “blood ties” to Denmark should be required for citizenship, though the statement was quickly retracted.
4/6 Hungary: Krisztina Morvai
A senior member of Jobbik, the anti-Semitic and anti-Roma party on Hungary’s far right wing. In 2009, she attracted international publicity after declaring: “So-called proud Hungarian Jews should go back to playing with their little circumcised dicks.” In 2009, she cancelled an interview with a British newspaper, declaring in tones of outrage: “I am a decent politician and the mother of three children, yet you in the west keep portraying me as a Nazi and a Fascist.”
5/6 Italy: Mario Borghezio
MEP for Italy’s notoriously racist Northern League, he has relentlessly attacked the nation’s first black cabinet minister, Cecile Kyenge, minister for integration, claiming she would import ‘tribal traditions’ into the Italian government. Other elected members in the party called her “an orang-utan” and suggested that someone should rape her, so she would understand how the victims of Somali rapists felt. He attracted attention by lobbying for the creation of an EU archive of UFO sightings.
6/6 Greece: Eleftherios Synadinos
Fabulously mustachioed retired lieutenant-general in the Greek army, he was one of Golden Dawn’s top candidates in the European elections, at which the overtly neo-Nazi party obtained more than 9 per cent of the vote. With its black-shirted assault squads, the Hitler photos and the party’s swastika-inspired logo, it has been accused of being a criminal organisation. Its website declares: “We aren’t the quiet birds of peace time, we are birds of the storm and the hurricane.”
But the Institute of Directors, a group representing UK businesses, said the proposal would “hamper healthy tax competition between member states”.
“The attempt to relaunch the stalled Common Consolidated Corporate Tax Base (CCCTB) project smacks of unhelpful political populism. Each European government faces different economic pressures and corporate tax is an important tool in helping them adjust to changing circumstances,” said Stephen Herring, head of taxation at the IoD.
“The EU should not be trying to impose a straightjacket on its members, particularly as it will almost certainly increase the level of tax for business.”
The European Commission is currently presided over by Jean Claude Juncker, a federalist conservative. Cracking down on tax avoidance featured in his presidential programme.
“We need more fairness in our internal market. While recognising the competence of Member States for their taxation systems, we should step up our efforts to combat tax evasion and tax fraud, so that all contribute their fair share,” he said in a statement shortly after his election last year.
A poll conducted in March by YouGov found that most British people believe that legal tax avoidance was just as wrong as illegal tax evasion.Reuse content