European Commission President Jean-Claude Juncker announced this week that the EU will go after attorneys and accountants that are pushing tax avoidance schemes onto their clients.
On Tuesday, Juncker told European Parliament members that by the end of June a draft proposal would be released to tackle this problem, one that came to the fore following the Lux Leaks and Panama Papers scandals.
The proposed plan will require multinational companies in the region to disclose greater amounts of information related to their tax payments and overall profits.
The EC President said individuals promoting tax avoidance schemes are the “real problem,” adding, “You can’t simply hide behind lawyers’ confidentiality. We are working on that. There is progress being made.”
Juncker also said, “The trust of our citizens has been seriously shaken by the revelations and there is a lot of indignation levelled at the corporate tax system, which is seen as unfair and insufficient.”
According to Juncker, this plan, if agreed to by all EU members, would be implemented in January 2019.
Is Juncker Haunted by Tax Avoidance During Luxembourg Years?
Juncker has been heavily criticized for allegedly favoring or turning a blind eye to these types of tax avoidance schemes during his time as Luxembourg’s Prime and Financial Minister from 1995 to 2013.
During this week’s hearing before European Parliament members, for instance, leftist German MEP Fabio di Masi accused Juncker of facilitating tax avoidance.
“He was the architect and the godfather of this cartel, you can see for example from when he took office, the so called tax rulings, which were big topic under the so-called Luxembourg leaks, exploded,” said Di Masi.
However, since taking over the reigns of the European Commission, Juncker has led an aggressive attack against such tax avoidance schemes.
In response to past criticism, Juncker told MEPs this week, “I believed in tax competition, which is a principle of the [EU] treaty and I still believe in tax competition, but I am focusing my attention now more on fair tax competition…It has to be fair and it was not always fair.”
About his time in power in Luxembourg, Juncker added, “I wasn’t responsible for financial and business issues…I never discussed fiscal measures with a company…Tax rulings are negotiated with tax authorities and not the ministers.”
While somewhat disappointed by Juncker’s statement, Greens’ MEP Sven Giegold felt that progress is being made to combat tax avoidance.
“It is disappointing that Juncker has refused to accept responsibility for past mistakes or admit the error of his ways,” said Giegold, adding, “Juncker may be blind to the past, but he’s now made some concrete commitments for the future.”
As reported by SputnikNews, this discussion followed the release of a comprehensive study by the Greens “showing how Luxembourg attempted between 2003 and 2005 — when Juncker was the grand duchy's prime minister — to block a very important [reform] to fight tax evasion: the Savings Tax Directive, which would automatically send tax information among member states.”
The image of Jean-Claude Juncker is credit to: 360b / Shutterstock.com