#OpenLux shows how big companies and billionaires use EU tax havens to set up shell corporations and dodge their tax bills.
Responding to the investigative series published today by Le Monde and 16 partners, Chiara Putaturo, EU tax and inequality policy advisor said:
“#OpenLux provides yet another example of how billionaires and big corporations are playing the system to dodge their tax bills. Setting up shell companies to enjoy low taxation comes at a real cost to ordinary Europeans. We are facing a deep economic and social crisis – lax tax rules and poor transparency in certain European countries allow big companies and billionaires to avoid paying their fair share of tax and siphon off thousands of euros needed for the recovery.
“The real scandal is that this is happening in Europe. Luxembourg is operating as a tax haven, yet it is absent from the EU tax blacklist as it excludes European member states. The EU needs to get its house in order to credibly point fingers at other countries in the world.
“This ducking and dodging of tax bills and looting of public resources is outrageous. European governments have an opportunity to end this by expanding the definition of harmful tax practices and reforming the EU blacklist.”
Notes to editors
Today a group of journalists from Le Monde and 16 other partners including Süddeutsche Zeitung, Le Soir, OCCRP, IrpiMedia, McClatchy et Woxx, started releasing their findings from the investigative case #OpenLux. It shows that Luxembourg is hosting 55,000 offshore companies with no economic activity. Multinational companies, billionaires, politicians and famous individuals have created these companies to facilitate tax avoidance, evasion, or money-laundering.
Spokespeople are available in Brussels to comment.
Oxfam’s three steps for the EU and member states to tackle tax havens:
Strengthen the EU’s list of tax havens. EU Finance Ministers will meet on 16 February to announce their review of the EU list of tax havens. The current weak and out-of-date criteria means actual tax havens are unlikely to be blacklisted. Crucially, the blacklisting process does not cover European countries. Oxfam’s latest analysis identifies five EU member states - Cyprus, Ireland, Luxembourg, Malta and the Netherlands – acting as tax havens. The European Parliament has called these countries tax havens and the European Commission has identified them as favouring aggressive tax planning. The Code of Conduct Group who is responsible for the EU blacklisting process and for assessing harmful tax practices in EU countries will review the criteria and its mandate this year.
Increase transparency of corporations. Public Country by Country Reporting (pCBCR) and transparency of beneficial ownership are crucial to disincentivise companies and individuals from evading their tax obligations. European governments have the opportunity to move forward with the pCBCR file at the Council competition meeting (COMPET) on 25 February – a file blocked at the Council level since 2016. The Code of Conduct Group proposed in 2016 a global exchange of beneficial ownership information as a criterion for the EU’s list of tax havens but they have yet to reach an agreement. #OpenLux highlights the importance of transparency as it would not have been uncovered without public beneficial ownership registers.
Review taxation policies on wealth. Individual wealth and capital incomes are currently undertaxed compared to other sources of revenue such as labour and consumption. Billionaires’ wealth has increased during the COVID-19 pandemic. A recent Oxfam analysis, the Inequality Virus, shows how Europe’s 305 billionaires have seen their fortunes grow by nearly 500 billion euro since March 2020 – enough to write a cheque of 11,092 euro to each one of the poorest 10% of Europeans. To bridge this gap, Oxfam is calling for an increase in wealth and capital income tax.
Contact information
Jade Tenwick | EU media lead | jade.tenwick.@oxfam.org | desk +32 2 234 11 15
Today a group of journalists from Le Monde and 16 other partners including Süddeutsche Zeitung, Le Soir, OCCRP, IrpiMedia, McClatchy et Woxx, started releasing their findings from the investigative case #OpenLux. It shows that Luxembourg is hosting 55,000 offshore companies with no economic activity. Multinational companies, billionaires, politicians and famous individuals have created these companies to facilitate tax avoidance, evasion, or money-laundering.
Spokespeople are available in Brussels to comment.
Oxfam’s three steps for the EU and member states to tackle tax havens:
Strengthen the EU’s list of tax havens. EU Finance Ministers will meet on 16 February to announce their review of the EU list of tax havens. The current weak and out-of-date criteria means actual tax havens are unlikely to be blacklisted. Crucially, the blacklisting process does not cover European countries. Oxfam’s latest analysis identifies five EU member states - Cyprus, Ireland, Luxembourg, Malta and the Netherlands – acting as tax havens. The European Parliament has called these countries tax havens and the European Commission has identified them as favouring aggressive tax planning. The Code of Conduct Group who is responsible for the EU blacklisting process and for assessing harmful tax practices in EU countries will review the criteria and its mandate this year.
Increase transparency of corporations. Public Country by Country Reporting (pCBCR) and transparency of beneficial ownership are crucial to disincentivise companies and individuals from evading their tax obligations. European governments have the opportunity to move forward with the pCBCR file at the Council competition meeting (COMPET) on 25 February – a file blocked at the Council level since 2016. The Code of Conduct Group proposed in 2016 a global exchange of beneficial ownership information as a criterion for the EU’s list of tax havens but they have yet to reach an agreement. #OpenLux highlights the importance of transparency as it would not have been uncovered without public beneficial ownership registers.
Review taxation policies on wealth. Individual wealth and capital incomes are currently undertaxed compared to other sources of revenue such as labour and consumption. Billionaires’ wealth has increased during the COVID-19 pandemic. A recent Oxfam analysis, the Inequality Virus, shows how Europe’s 305 billionaires have seen their fortunes grow by nearly 500 billion euro since March 2020 – enough to write a cheque of 11,092 euro to each one of the poorest 10% of Europeans. To bridge this gap, Oxfam is calling for an increase in wealth and capital income tax.
Jade Tenwick | EU media lead | jade.tenwick.@oxfam.org | desk +32 2 234 11 15