The European Union should introduce a centralised public register revealing the identities of beneficial owners of companies and trusts, according to a pan-European report to be published today.
Hidden Taxes: the EU's Role in Supporting an Unjust Global Tax System, a study by 19 non-governmental organisations from across the EU, compares the tax systems of 15 EU member states, with Ireland scoring poorly on all areas.
The report, which includes contributions from the Debt and Development Coalition Ireland, highlights Ireland's status as an attractive location for special purpose entities, noting its lack of "financial and company transparency" is one of the reasons for its status as a hub for special purpose entities (SPEs).
“Ireland’s tax model facilitates a significant presence of special purpose entities that lack real economic substance in the Irish economy,” the report states. While noting the government’s stated support for the OECD’s action plan on base erosion and profit shifting, it notes the Government “does not require transnational corporations in any sector to provide an annual public account of the turnover, number of employees, subsidies received, profits made, and taxes paid”.
Low-tax location
"Despite international criticism, the Irish Government is unapologetic about promoting Ireland internationally as a low-tax location for companies," it states, adding Ireland is changing its corporation taxation policies "only within collective EU or OECD actions, or when it comes under serious external pressure to do so".
Ireland also performed badly for the impact of its tax policies on the developing world, though the report welcomed the Government plan to shortly publish a “spillover analysis” commissioned to ascertain the impact of Ireland’s tax system on developing economies.
The report found France is the strongest performer on transparency and reporting rules for transnational corporations and it has "actively championed the issue".
However, the report criticises the fact none of the EU governments studied actively supports the establishment of an intergovernmental body on tax under the auspices of the United Nations, which would allow developing countries have a say on global tax. Instead, most favour the OECD model.
The report, compiled by high-profile civic organisations including Oxfam and Christian Aid, will increase pressure on the EU to prioritise the fight against aggressive tax planning in the wake of the Luxembourg leaks scandal which revealed more than 340 companies benefited from tax rulings in Luxembourg between 2002 and 2010.
The new president of the European Commission, Jean-Claude Juncker, was prime minister of Luxembourg when the deals were made.
Juncker in spotlight
Yesterday the Green group in the European Parliament called on Mr Juncker to appear before the European Parliament to explain his role, with the parliament due to debate the issue today. A spokesman for Mr Juncker reiterated the president would respond to an official request from the parliament, but not to requests from any individual political groups.
Mr Juncker flies to Brisbane this evening to represent the commission at the G20 at which aggressive tax planning and base erosion profit shifting is expected to top the agenda.
