Tax agreements granted by European governments to multinationals, a practice of tax optimisation, allowing them to partially avoid tax, almost tripled between 2013 and 2015. This is per a study, published today (Wednesday) by the NGO Eurodad. Belgium and Luxembourg are the two countries which have concluded the greatest number of tax agreements (or “tax rulings”) with multinationals, he also stated.
According to this study, entitled “Survival of the Richest: how can Europe Support an Unfair Tax System,” the number of tax agreements of this type, described as “compliance agreements”, went from 547 in 2013, to 972 in 2014 and 1,444 en 2015.
Eurodad explained that its study is based upon data published by the European Commission to obtain these figures, which relates to 17 EU states, as well as Norway, the fiscal policies of which were analysed.
The increase in the number of tax rulings is “very surprising and deeply worrying,” commented Tove Ryding, co-author of the report by Eurodad, which deals with the issue of “tax fairness”.
“With the examples of Apple and LuxLeaks ringing in our ears, we know that these secret agreements can be used for tax evasion ends by multinational companies,” Tove Ryding explained.
Apple, which entered into an arrangement with Ireland allowing it to avoid a large amount of tax for several years, was ordered at the end of August by the European Commission to repay to Dublin 13 billion euros in undue tax advantages.
The scandal LuxLeaks, in 2014, centred about more than 350 “tax rulings” granted by the Luxembourg administration to companies, revealed by two former employees from the audit firm PricewaterhouseCoopers (PwC).