The European Commission engages 16 biased advisers on tax evasion
PRESS RELEASE: European Commission is engaging biased advisers on how to curb tax evasion
04 May 2011
The European Commission recently nominated a group of 16 ‘non-governmental’ experts to form a group on transfer pricing, whose advice could help improve capacities to raise tax revenues for the public . These experts, however, consist of large multinational groups and the ‘big four’ audit firms.
The manipulation of transfer prices, namely the systematic under- or over-evaluation of transfer prices between subsidiaries of the same multinational company, is the biggest source of illicit profit and capital flows around the world. This is at the expense not only of the poorest countries, which have to watch a vital tax base disappear, but also of taxpayers in Europe, which are forced to compensate for this loss of income by increasing austerity measures.
The figures involved are gargantuan: annual illicit flows added up to between USD 725 and 810 billion in the period between 2000 and 2008. Of this, 54.7% resulted from the manipulation of commercial transfer prices.
“It’s common knowledge that most multinationals (see the examples of Google, SAB Miller, the world’s second biggest beer company, and Glencore a giant of the mining sector), are actively involved in these practices, with the aim of transferring their profits to the countries with the most favorable tax regimes,” said Nuria Molina from Eurodad. “What’s more is that they are aided in this by major financial consultancy and audit firms.”
“In view of the astronomical sums of money at stake, during this time of financial crisis, it would be a good idea for the European Commission to widen its group of official experts beyond the multinational companies -for example, by accepting applications from NGOs, trade unions and other social and civil organizations,” said Arnaud Zacharie from CNCD-11.11.11. “The current composition of this group of experts gives out an appalling message which calls into question the genuine will of the Commission to tackle those practices which result in the impoverishment of citizens and tax payers.”
Antonio Gambini, Development Finance Officer at CNCD-11:11:11: +32 (0)479 48 28 78
Arnaud Zacharie, Secretary General at CNCD-11:11:11: +32 (0)495 92 35 58
Nuria Molina, director of Eurodad: +32 (0)28944640
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