A European Parliament committee has published letters from EU member state officials describing tax ruling practices, efforts to combat tax avoidance, and compliance with EU spontaneous exchange of information directives.
The letters, published by the European Parliament’s Special Committee on Tax Rulings and Other Measures Similar in Nature or Effect, respond to an information request sent by the committee to 30 jurisdictions pursuant to the committee’s mandate to investigate the tax ruling practices of EU states and EU efforts to combat tax avoidance. As of June 29, the committee has published 13 letters on its website.
Though the committee asked each country to list the names of all companies that have been granted private tax rulings, none of the countries disclosed that information in the published letters. Many countries explicitly refused, citing a need to keep the information confidential.
The Netherlands submitted data showing that it issued 632 private tax rulings in 2014, including 203 advance pricing agreements (APAs) and 103 rulings on the application of the Dutch participation exemption regime. The data showed that The Netherlands has issued 14,619 private tax rulings since 1991.
Ireland revealed that it issued 335 private rulings from 2010–2012 relating to corporate tax matters.
Latvia said that it issued one APA since 1991 involving the acquisition of goods, but the country did not disclose the number of other private tax rulings issued. Jersey said it has granted six tax rulings involving cross-border tax activities during the past five years, while Guernsey said it has issued no tax rulings since 2008.
Spontaneous exchange of information
The committee also asked countries to disclose all information shared with other member states pursuant to EU directives that require the spontaneous exchange of information that is foreseeably relevant to the tax administration of another state.
While none of the countries provided the actual information exchanged, some countries did offer some insight into their practices.
Ireland said that it has spontaneously shared information with member states on 29 occasions since 2010, while Belgium said it spontaneously exchanged information with nations 785 times during that period.
The Netherlands provided data on information exchanged on a country-by-country basis. In 2014, The Netherlands exchanged data spontaneously 139,973 times with Germany, and 610 times with other EU states.
Luxembourg revealed that “a limited number of rulings have been exchanged on a spontaneous basis some time ago.”
Latvia said total information requests fulfilled since 2010 numbered 529, but the country did not separately reveal the number of spontaneous information exchanges.
The committee also requested a list of current tax treaties that have the effect of reducing corporate tax rates. In response, most countries said they did not have any such treaties. Some countries listed tax treaties that provide for reduced withholding tax rates.
All the countries described in detail the actions they have taken and plan to take to increase corporate tax transparency and reduce corporate base erosion and profit shifting. Countries also discussed the basis for any list of non-cooperative jurisdictions.
The committee was established February 12 by the European Parliament in response to the “Lux Leaks” disclosures, where Luxembourg’s complicity in MNE tax avoidance was revealed through 548 Luxembourg private tax rulings that were leaked and published on the Internet by a journalist group.
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