The European Commission has laid out its plans in a new Tax Transparency Package to clamp down on tax deals made between EU governments and multi-national corporations. As of next year, EU members would have to declare their cross border tax rulings every three months, as well as divulging information on existing deals. The Package comes during ongoing investigations into a number of member states’ tax regimes, and concerns that tax rulings which give a low level of taxation in one member state can entice companies to shift profits there artificially, leading to serious erosion of possible tax revenues for other member states.
In particular, the Commission is investigating deals between multinationals and governments in Luxembourg, Ireland, the Netherlands, and Belgium, and whether some of these agreements amounted to state aid. Last year, allegations emerged that around 340 multinational companies had tax avoidance deals with Luxembourg.
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