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Engie tax deal: individual investigations cannot replace real reform
The European Commission today ruled that a tax deal between Luxembourg and the French energy company Engie (formerly GDF-Suez) was illegal. It ordered Engie to pay EUR 120 million in unpaid taxes to Luxembourg.
Reacting to the news, Oxfam’s EU tax policy advisor, Johan Langerock, said:
“It’s good to see the Commission continue their crackdown on tax avoidance by Europe’s largest companies. When big businesses don’t pay their fair share of tax, there is less money to invest in education or healthcare – public services that are crucial to reduce inequality.
“Currently, case-by-case investigations are needed to shed light on the sweet-heart tax deals that many companies have with European governments. To truly hold companies to account, we need rules which require companies to publish key data on where they do business and make profit - and where they pay tax. However, despite approval from the European Parliament, EU governments are currently blocking these rules, which would help reveal dodgy deals like this one. Full transparency on corporate tax practices must become the new normal.
“One third of Engie is publicly owned by the French government. France cannot claim to be leading the fight against tax dodging if they do not hold their own companies to account.”
- Oxfam’s EU tax expert Johan Langerock is available in Brussels for interviews and background.
- This new decision follows earlier Commission decisions on tax deals by Luxembourg with Amazon and Fiat, Ireland with Apple as well as the Netherlands with Starbucks. The European Commission has also declared illegal selective tax advantages granted by Belgium under its "excess profit" tax scheme, which has benefitted at least 35 multinational companies. The European Commission is currently investigating Luxembourg’s tax deal with McDonald’s, the Netherland’s tax deal with Ikea and a UK tax scheme linked with the British Controlled Foreign Company (CFC) rules.
- Tax dodging costs developing countries $170 billion a year: $70 billion through tax dodging by super-rich individuals and $100 billion through corporate tax dodging.
- New legislation proposed by the European Commission and approved by the European Parliament would introduce so-called public country-by-country reporting for big companies. It would require big multinational businesses to make public how much profits they make and how much taxes they pay for each country they operate in. The file is currently blocked by member states governments.
Florian Oel | Brussels | firstname.lastname@example.org | office +32 2 234 11 15 | mobile +32 473 56 22 60