European Commission proposals to clampdown on corporate tax avoidance

Wednesday 05 December 2012 17.50
The European Commission claims tax schemes cost member states €1 trillion a year
The European Commission claims tax schemes cost member states €1 trillion a year

The European Commission is to bring forward proposals aimed at clamping down on corporate tax avoidance schemes.

The move could affect Ireland and the high-tech companies that have their international headquarters here.

It is understood the proposals will include an EU-wide “black list” of tax havens and an action plan aimed at tackling tax evasion and avoidance.

The commission has said such activities deprive member states of almost €1 trillion every year.

There has been pressure on Europe to tackle the practice of profit-shifting and "transfer pricing", which allows companies to legally move income earned in one country to another jurisdiction to lower their total tax bill.

The proposals come in response to widely-voiced concerns about the avoidance of tax by global companies such as Google, Microsoft, Amazon, Apple and Facebook.

Measures aimed at tackling the practices would affect countries such as Ireland and Luxembourg, which have corporate tax structures that facilitate multinationals in sending profits offshore.

Google, Apple, Microsoft and Facebook have international headquarters in Ireland, while Amazon's international offices are in Luxembourg.

However the biggest European markets for all those companies are Germany, France and Britain.

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