As Europe slowly pulled itself out of the economic and financial crisis, European governments’ attention turned to focus, inter alia, on the need to conserve resources to boost Member States’ budgets and address perceived inequalities in the single market. Within this context – and driven by public and NGO concern – the spotlight turned on those Member States that sought to attract investment from multinational corporations by offering them so-called sweetheart deals which offered companies preferential tax arrangements. In November 2014 Lux Leaks, which identified more than 340 companies deemed to have pursued aggressive and unfair tax planning practices fanned attention on the issue and catapulted the extent of tax avoidance in Europe to public attention. This provided the impetus for the European Commission to review its policy and start implementing changes. Since 2014 the Commission has focussed its attention on fighting tax avoidance and aggressive tax planning – both internally (via State Aid cases on tax rulings and actions set in the 2015 Plan for Fair and Efficient Corporate Taxation in the EU) and internationally supporting the OECD Base Erosion and Profit Shifting (OECD BEPS) initiative which was launched in 2013.
This snapshot takes a close look at the anti tax avoidance package, published on 28 January and puts it into the current political context.