EU leaders tackle tax fraud said to cost a trillion euros a year at a summit on Wednesday in the hope that tightening up the rules will help restore faith in European integration and raise revenue.
But Austria and Luxembourg are both reluctant to sign up and share information on bank accounts automatically for fear of undermining their important financial services sectors.
The one-day summit also takes place as revelations about the tax practices of some of the world’s biggest companies in their own backyard make it easy for critics to pick holes.
In Washington on Tuesday, Apple chief executive Tim Cook was closely questioned by US lawmakers on what were attacked as “sham” subsidiaries and “convoluted” strategies to shift profits offshore, with Ireland – the current chair of the EU – put squarely in the spotlight.
It emerged that some Apple units in Ireland pay only a 2.0-per cent tax rate, far short of the country’s already low and much criticised 12.5-per cent corporate tax levy.
Such arrangements are legal, but popular criticism of them has grown in a time of austerity, tax rises and budget cuts.