EU's Juncker defends position, urges global tax evasion fight

GMT 02:25 2014 Saturday ,15 November

Arab Today, arab today EU's Juncker defends position, urges global tax evasion fight

Jean-Claude Juncker
Brisbane - AFP

European Commission head Jean-Claude Juncker urged a global fight against tax evasion Saturday while defending his position after revelations top companies paid less tax during his time as Luxembourg premier.
"I really do think that on the international, on the global level, we have to fight all together against tax evasion," he told reporters ahead of the G20 summit in Brisbane.
Tax is a key issue at this weekend's gathering of world leaders in the sun-baked Australian city, with the host country Friday vowing a "very aggressive" crackdown on tax avoidance.
It comes as Juncker, who took over the European Commission on November 1, faces pressure over generous tax concessions offered to top global companies when he was prime minister of Luxembourg.
An international journalistic investigation revealed this month that Luxembourg allowed hundreds of top companies -- including Pepsi, IKEA and Deutsche Bank -- to enjoy preferential tax treatment.
The revelations reveal that in some cases tax bills were as low as 1.0 percent of earnings for some of the world's richest companies -- a politically explosive development at a time when cash-strapped EU governments have sharply cut budgets.
Asked whether he agreed that Luxembourg's tax policies had been "picking peoples' pockets", Juncker said: "Tax avoidance is an important issue for each and every one of us.
"We are decided in Europe to fight against tax evasion," he said, adding that when he had addressed the EU before being voted into office as president he had mentioned this as an issue.
- 'Fair tax competition' -
Juncker, who was Luxembourg's prime minister from 1995 to 2013, has previously denied he was the "architect" of the system and vowed to fight "unfair" tax evasion as head of the EU's executive.
He said Saturday that tax evasion sometimes happened due to the "interactions between very divergent national tax rules" and Europe was working to change this.
"In accordance with the law you can create a situation, the result of it is a very low taxation for companies. This has to be avoided," he said.
Juncker, whose call for tax reform comes as Europe is still struggling with the impact of austerity measures and an uneven recovery, repeated that he was committed to reducing tax loopholes within Europe.
"What we are intending is not a fully fledged harmonisation on each and every detail, but eliminating from our national tax legislations the open gates for tax evasions," he said.
"I am in favour of tax competition but I am also in favour of a fair tax competition in Europe."
The commission is currently investigating several member states over allegations they offered corporate giants such as Apple, Starbucks and Amazon state aid in the form of sweetheart tax deals.
Australia has enthusiastically backed calls to close corporate tax loopholes in its role as host of this weekend's G20 summit in Brisbane, making it a primary focus of the meeting.
Australian Treasurer Joe Hockey said Thursday the practice of corporations shifting profits from one nation to another to minimise their tax was robbing countries of much-needed revenue and had to stop.
"It is theft when someone does not pay the tax that is due to a nation and it undermines the ability of that nation to be able to deliver the sorts of services that are essential to alleviate poverty, to reduce inequality," Hockey said.


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