EU countries are still failing to tackle tax avoidance practices despite vowing to shut down loopholes after the LuxLeaks scandal one year ago, a report by campaign groups said.
The 28 member states of the European Union have passed a number of measures in the 12 months since LuxLeaks revealed that top companies, including Pepsi and Ikea, had reduced their tax rates to as little as one per-cent in sweetheart deals with Luxembourg.
The revelations, unearthed by a group of investigative journalists, were a huge embarrassment to European Commission head Jean-Claude Juncker, who served almost two decades as Luxembourg prime minister at the time of the deals.
But Tuesday’s report by 19 organisations including Oxfam, coordinated by the European Network on Debt and Development, said most member states still provide “ample opportunities” for multinationals to “dodge taxes and hide money”.
“Although tweaks have been made and some loopholes have been closed, the complex and dysfunctional EU system of corporate tax rulings, treaties, letterbox companies and special corporate tax regimes still remains in place,” the report said.
Luxembourg and Germany remain the “worst culprits” in terms of offering options to conceal company ownership, the report said, although Denmark and Slovenia are introducing public registers of company ownership.