Breaking News

EU targets letterbox companies

The European Commission has declared its wish to put in place new rules in order to fight against tax evasion, a month after the revelations of OpenLux on the Luxembourg financial center.

The European Commission has declared its wish to put in place new rules in order to fight against tax evasion, a month after the revelations of OpenLux on the Luxembourg financial center.

(ASdN with Diego Velasquez) – Since the “OpenLux” revelations which showed how rich fortunes and multinationals save taxes thanks to the services offered in Luxembourg, almost nothing has changed on the national territory. In Brussels, on the other hand, the Commission does not intend to stand idly by. On Wednesday in the European Parliament, it announced its intention to quickly fill the gaps in European legislation that still allow aggressive tax planning.

But the European Commission does not intend to stop there. She thus took advantage of the discussion to announce a series of measures that she intends to take in the fight against tax evasion. Among this long list, one of them did not go unnoticed. Namely, the modification of European rules on tax evasion with the aim of subjecting so-called letterbox companies to scrutiny.

“We must not rest on our laurels,” said European Commissioner for Economic Affairs Paolo Gentiloni. For the former Italian Prime Minister in the European Parliament, Openlux has been “instructive in showing how such constructions contribute to tax evasion.” According to him, letterbox companies – without or with very little economic substance – can indeed “constitute a serious threat to the single market by shifting profits”, he said before adding that this could be problematic for Luxembourg. According to calculations by the International Monetary Fund, these companies accounted for 6% of the country’s gross domestic product in 2018.

“Failed checks”

In addition to these threats of tax evasion, the “OpenLux” search also revealed other inconsistencies, in particular in the “Register of Beneficial Owners” (RBE). While this transparency register is supposed to reveal the owners of Luxembourg-based companies, journalists’ surveys have shown that for around half of Luxembourg companies, the information promised was missing or misleading. For the European Commissioner, this is therefore “a failure of controls”. A criticism nonetheless shared by the Luxembourg government, which wishes to make improvements in this area.

However, the supposed quality of this register belonged to the central line of defense of the government, also internalized by the opposition in Luxembourg. “So far, not even half of the member states have set up a register of beneficial owners – and above all, they are not necessarily as complete and free as what is already the case in Luxembourg”, said, by example, the MEP Christophe Hansen (CSV).

Luxembourg still in the pillory

“The OpenLux scandal proves what everyone already knows”, declared for her part Manon Aubry, leader of the European left. Namely, that Luxembourg “is one of the worst tax havens in the world”. For Sven Giegold, tax expert of the European Greens, the situation is also clear: “We have empty funds, there is a great need for investments and at the same time aggressive tax evasion and tax evasion remain allowed in the market. inside the EU, ”he lamented, saying that“ must change ”.

Marc Angel, LSAP parliamentarian, took a similar point of view: “Tax justice is an important issue and EU member states must look at themselves in a mirror” who regrets that the changes following the PanamaPapers scandals and LuxLeaks were not enough. But for the Luxembourg politician, it is important not to limit the debate to the Grand Duchy. “We wouldn’t have this debate today if Luxembourg had a transparency register like some other EU countries, even the biggest ones. The ‘race to the bottom’ is not only the fault of the small Member States, but also of the large Member States participating in it, ”he said.

A finding that Paolo Gentiloni also recognized following the debate. “OpenLux has shown where we are now,” he concluded with a slightly ironic tone. After all, he recalled, the transparency register is a “consequence of a European directive that Luxembourg has implemented in an exemplary manner”. But the analysis of the journalists of “OpenLux” showed it well: “there is still a lot of transparency and work to be done”.


Tags

Related Articles

Back to top button
Close
Close