What does aggressive tax planning mean

Fabio De Masi (DIE LINKE.), Deputy Chairman of the European Parliament's Committee of Inquiry into Money Laundering, Tax Avoidance and Evasion (PANA), comments on the presentation of the EU Commission's plans to disclose aggressive tax models:

“On the one hand, it's good to know what tricks the tax avoidance industry can come up with. On the other hand, the fact that such tricks even exist is revealing. Aggressive tax planning - a vague term - only exists because poor tax legislation creates loopholes. EU member states are losing hundreds of billions of euros annually to tax avoidance and evasion, while at the same time making devastating cuts in public investment and the welfare state. "

"The EU must overcome the far too complex system of transfer prices and regard multinational corporations as a unit, no matter how many letterbox companies exist, and guarantee a broad assessment base and effective minimum taxation in all member states."

“We have to strengthen the national tax authorities, which are currently having to surrender to tax fraudsters and tax planners as a result of cuts and downsizing. Member States should also unilaterally levy withholding taxes on financial flows in tax havens inside and outside the EU. The free movement of capital - as enshrined in the EU treaties - undermines tax justice, as the ECJ has already attacked withholding taxes in its Cadbury-Schweppes ruling. Legislation needs to be clarified to the effect that member states have the right to defend their tax base. "

“We need tough sanctions against 'enablers' and 'promoters' of illegal tax evasion, for example the withdrawal of the business license. Tax havens need alternatives to the 'race to the bottom' by changing the strict state aid rules with a view to a forward-looking industrial policy and investment-driven development, ”concluded De Masi.

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