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For the first time since the so-called LuxLeaks scandal broke more than a year ago – where documents leaked showing hundreds of multinationals had received extremely favourable tax treatment in Luxembourg – the issue of corporate tax avoidance has suddenly moved back into the spotlight thanks to actions taken by both London and Brussels to begin clawing back millions in allegedly underpaid taxes.
Tomorrow, Pierre Moscovici, the former French finance minister who now oversees tax issues for the European Commission, is due to unveil the latest in a series of measures aimed at cracking down on “sweetheart” tax deals. Mr Moscovici’s task today will be as much political as financial, since his boss Jean-Claude Juncker was Luxembourg prime minister when the LuxLeaks deals were struck and has suffered some political damage as a result.
Alex Barker, who long covered corporate tax issues for the FT Brussels bureau, has tallied up the windfall for treasuries thus far and asks whether the headline numbers, which seem big, are actually that big at all:
The long suffering European taxman is looking for redress. Over the past three months alone roughly €1.25bn has been clawed back from multinationals across the EU, led by the European Commission’s series of cases brought against companies in Belgium, Luxembourg and the Netherlands, which Mr Moscovici will no doubt tout today. It all sounds impressive. But scratch the surface and an enduring truth becomes clear: tax collectors are usually more hampered by European politics than helped.