EU Sets Up Tax Evasion Policy Hub Amid Push for Global Deal

Bookmark

The European Union created a monitoring body to help drive policies against tax evasion and avoidance, just as a global push gathers steam to change the treatment of corporate revenues.

Economy Commissioner Paolo Gentiloni told reporters in Brussels that the new EU Tax Observatory will become “a hub of new ideas” that will inform the bloc’s decision-makers by compiling data, and providing research and analysis.

“As we focus on the recovery after the pandemic, and on massive investment needed to deliver the green and digital transitions, fair taxation is more important than ever,” Gentiloni said. “We need to further strengthen our armory against tax abuse.”

The initiative comes at a time of “unprecedented opportunities” for an international agreement, he added, referring to a global deal being negotiated at the Organization for Economic Cooperation and Development to overhaul taxation rules and make multinationals pay more in countries where they operate.

Momentum toward such an accord has been stoked by proposals from President Joe Biden’s administration that include a global corporate minimum tax of at least 15%. Gabriel Zucman, a University of California at Berkeley economist who heads the new observatory, said that floor was “way too low.”

“All G-7 countries have tax rates that are significantly higher than 15%,” he said, speaking alongside Gentiloni.

The key problem with globalization “is that its main winners -- multinational companies and their shareholders -- have been able to pay less and less in taxes while other groups of the population that have not benefited as much from international economic integration have had to pay more,” Zucman added.

©2021 Bloomberg L.P.

BQ Install

Bloomberg Quint

Add BloombergQuint App to Home screen.