European Commission action plan on tax is a good step but lacks ambition

Published: 15th July 2020

Today, the European Commission published an ‘Action Plan For Fair And Simple Taxation Supporting The Recovery Strategy’, and a communication on ‘Tax Good Governance in the EU and beyond’. Also today, the General Court of the EU has ruled that the tax deals between Ireland and Apple were legal, overturning the European Commission’s previous decision.

Chiara Putaturo, Oxfam’s EU Policy Advisor on tax and inequality, said:

“The Apple case has highlighted once again the urgent need to reform our tax system and make it fair. Today’s Commission proposals for fair taxation to fund the coronavirus recovery could not come at a more critical moment.

“The Commission’s commitment to update the obsolete definition of harmful tax practices and review the list of non-cooperative jurisdictions is a promising step in the fight against tax havens. However, it is worrying that the Commission ignored the urgently-needed corporate tax reforms such as a digital tax and minimum taxation. Without these reforms, the price of the coronavirus recovery will be paid by the poorest people in society, rather than by long-undertaxed companies that can and should contribute more.

“Tax dodging has deprived rich and poor countries alike of billions of euros that are vital for a fair economic recovery from COVID-19. Rather than going into the pockets of the richest, this money should be used to build a more resilient and just economy and stronger health and social protection systems that benefit ordinary people, and women in particular.”   

Notes to editors

  • Today, the European Commission published a tax package that includes an Action Plan for Fair and Simple Taxation Supporting the Recovery Strategy, a communication on Tax Good Governance in the EU and beyond, and a revision of the Directive on automatic exchange of information. In the communication, the European Commission proposed ideas to reform the Code of Conduct for Business Taxation, a code established in 1997 that defined harmful tax measures. It is used as a reference for assessing harmful tax practices in member states and in the EU tax havens listing process. The Eruopean Commission proposed also a review of the EU list of non-cooperative jurisdictions for tax purposes.  
  • Oxfam highlighted the weaknesses of the EU definition and methodology used to assess harmful tax practices in the report Off the Hook, and in a recent analysis. Because of these flawed criteria, several actual tax havens outside the EU have not been blacklisted, and five EU member states continue to operate as tax havens.
  • Today, the General Court of the EU has overturned the European Commission decision in 2016 that declared two tax deals between Ireland and Apple illegal. Read Oxfam’s reaction to the court ruling. According to the EC, Apple was granted an advantage by Ireland over other companies thanks to a preferential tax deal. As a result, the EC ordered the company to pay EUR 13 billion in unpaid taxes. Ireland and Apple challenged the decision in court.
  • Oxfam urges that the economic recovery from COVID-19 is paid for by taxation on the most profitable corporations and the richest individuals, and by an effective fight against corporate tax avoidance and harmful tax practices.
  • Corporate profit shifting reduces the corporate tax revenue of the European Union by around 20% and developing countries lose around USD 100 billion each year due to tax avoidance by multinational corporations.

Contact information

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