Tax avoidance via the ISDS is yet another problem with the TTIP

16 February 2016

Tax avoidance via the ISDS is yet another problem with the TTIP

Foto: Geralt

The opportunities for tax avoidance offered by the Transatlantic Trade and Investment Partnership (TTIP) and other trade treaties represent the umpteenth disaster in a thoroughly disastrous dossier. This was the SP’s response to a report published yesterday by the Transnational Institute (TNI) and Global Justice Now. Although countries are adding explicit reservations regarding tax issues to trade treaties to which they are party, it turns out that corporations still see an opportunity to bring and even win arbitration cases in relation to taxation.

SP Euro-MP Anne-Marie Mineur is incensed. “Once again we have an entirely new way to avoid paying tax,” she says. “We’re already going to have great difficulty with the Investor State Dispute Settlement (ISDS) arbitration system which will be used in many treaties of this kind, because it gives foreign corporations advantageous treatment in comparison to domestic companies and workers. Now it turns out that foreign investors will be able to escape their responsibilities in other ways, too. They certainly make use of the roads and facilities constructed using taxpayers’ money and of employees educated and trained using taxpayers’ money, yet they’re refusing to do anything in return. I find that unacceptable.”

Mineur has put a number of questions to the European Commission, which is currently in negotiations with several countries on free trade treaties which include the ISDS arbitration system or a variation of such. “If it’s apparently not possible to lodge a reservation regarding questions of taxation by means of what’s known as a ‘carve-out’, the Commission should surely reconsider whether we wish to work with this system at all,” she argues. “In my view this is the umpteenth proof that ISDS is an unjust system, it’s simply wrong, and that also goes for the trade treaties of which it forms part. It would be better to quit the whole thing today than tomorrow.”

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