International

First of all ex-European Commissioner Neelie Kroes wrote a strongly-worded letter to The Guardian: her successor, the Dane Margrethe Verstager , must not interfere with the tax agreements between member states and multinationals like Apple.  Then, two members of the centre-left Dutch Labour Party (PvdA) repeated the argument in the Dutch daily De Telegraaf.  Apple has lobbyists everywhere. I would have expected this from Neelie Kroes, who is up to her ears in the world of the multinationals. That PvdA members lend themselves to it, however, is disappointing. That we shouldn't be putting ourselves in the hands of the European Commission when it comes to taxation policy is something that I have always argued.  And multinationals must one way or another start to pay a decent amount of tax, though neither Neelie Kroes nor the Labourites seem to be able to get this through their skulls. 

Early last year I tweeted that it was a pity that the Greens had based the mandate for the committee of enquiry into tax evasion via Luxembourg – LuxLeaks - on the European Union's regulations governing state aids. In doing so they handed the matter wholly over to the ideas of the European Commission itself, because when it comes to state aids neither the European Parliament nor the member states have any further say. Yet the entire EP applauded the setting up of the committee of enquiry on this misguided legal base. This went equally for the liberals of ALDE and the social democrats in the PSD.  I was one of the few MEPs who didn't go along with this, however much I too want to see tax evasion by multinationals tackled. In that sense Kroes and others could have done more to fan criticism, when everyone was still so enthusiastic. Now they give the opposite impression; at the moment when Apple finds itself in a hole, they spring into action. This isn't credible. 

When it comes to doing something about tax evasion, I have long had more faith in the OECD than in the EU. If the whole of the industrialised world makes clear agreements on measures to increase transparency in relation to taxation agreements, and as a consequence  corporations pay taxes in the countries where they actually make profits, without resorting to all sorts of creative accountancy tricks, then we'll be getting somewhere. And that's just what the OECD has done. It has got somewhere. You can always do better, but it's agreements between governments which have handed responsibility to their national parliaments. Support for this is therefore rather stronger than it is for one-sided assessments made by a European Commissioner. 

For the future, then, I'm arguing that OECD agreements should be given a leading role, including for the EU. At the same time we could be continuing to work on agreements on just how company taxes should be calculated – in other words, how do you calculate the profits on which a multinational should be taxed? And what should the lower limit be below which you certainly should not fall if we are to avoid a race to the bottom between the member states? But before we get that far, I can honestly say that I think it's great that Verstager has scared the living daylights out of the multinationals.  With the aid of such pressure the member states can come to stronger agreements than they could if nothing had been done. That should also be Verstager's intention, but she shouldn't, above all, think that she can simply grant herself broader and broader powers in this area.