October 21 2015 - The European Commission’s new ruling against ‘sweetheart’ tax deals, between Starbucks and the Netherlands and between Fiat Chrysler and Luxembourg, is a critically important recognition that one country’s tax decisions can severely damage other countries, Christian Aid says today.
“In its ruling against these cosy tax deals, the Commission has made a hugely important point: that it is wrong for one country to lure multinationals with low tax rates, at the inevitable expense of people in other countries,” said Toby Quantrill, the charity’s Principal Adviser on Economic Justice.
“The Commission has established a principle which is both factually and morally correct and we look forward to seeing the ripples it will create both within and outside Europe. Poor countries also suffer from the impacts of these kinds of deals, but are not protected by EU rules”.
Mr Quantrill also pointed out that the OECD’s recent work to catch up with tax-dodging multinationals (the ‘BEPS’ project) had failed to consider the sort of spillover effects highlighted by the new Commission ruling, despite many calls for it to do so.
“We need to see a process to look at this problem globally, not just within the EU,” he said. “Global rules requiring all companies to publish basic information about where they do business and what taxes they pay in each country where they operate would help reveal where these kinds of deals are taking place.”
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Notes to editors:
1. Christian Aid works in some of the world's poorest communities in around 40 countries at any one time. We act where there is great need, regardless of religion, helping people to live a full life, free from poverty. We provide urgent, practical and effective assistance in tackling the root causes of poverty as well as its effects.
2. Christian Aid’s core belief is that the world can and must be changed so that poverty is ended: this is what we stand for. Everything we do is about ending poverty and injustice: swiftly, effectively, sustainably. Our strategy document ‘From Inspiration to Impact’ outlines how we set about this task.
3. Christian Aid is a member of the ACT Alliance, a global coalition of more than 130 churches and church-related organisations that work together in humanitarian assistance, advocacy and development. Further details at http://actalliance.org
4. Follow Christian Aid Ireland on Twitter: http://twitter.com/christianaidirl
5. For more information about the work of Christian Aid visit http://www.christianaid.ie