EU steps up probe into tax haven activities. Hit ’em hard

From the Financial Times:

“Brussels has stepped up its probe into alleged illegal sweeteners offered to multinationals by expanding the investigation to cover arrangements for patent-holders and ordering Luxembourg to reveal its promises to specific companies.

The rare issuance of a formal injunction requiring Luxembourg to co-operate indicates the importance the EU’s top antitrust regulator is placing on its scrutiny of tax deals several European countries offered the likes of Starbucks and Apple.”

The investigation, which began last summer, now covers at least six countries – “we are not a tax haven” Ireland,  Luxembourg, the Netherlands, Belgium and Gibraltar, and (the FT reports today) the United Kingdom. Cyprus, Malta and Hungary have similar ‘patent box’ schemes to the UK, and could also be in the firing line, though the EU has not made details public. The EU probe, the FT adds, it “is now led by some of Brussels’ most seasoned investigators.”

The Irish Times adds:

“Yesterday, the commission disclosed that it had issued a formal injunction requiring Luxembourg to co-operate with the inquiry, saying the jurisdiction had “failed to adequately answer previous requests for information” on the grounds that it impinged on “fiscal secrecy”.
. . .
Should the commission find evidence of illegal state support it can require all revenue lost from unlawful sweetheart deals to be recouped.”

Phew! Hit ’em hard, we say. Break down those walls of secrecy, criminality and abuse.

Along with Europe’s recent apparent victory on the subject of secrecy, this is all potentially very good news for ordinary taxpayers around the world.

We don’t have time today to do justice to this story; we’re blogging this really as a marker.

Click on the links to read the histories of how Ireland, Luxembourg, and Belgium became tax havens.