Push for Tax-Evasion Probe Clears Hurdle in EU Parliament

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The European Parliament’s Green Party cleared the first legal hurdle in its push for a probe of tax evasion in the wake of revelations about hundreds of sweetheart deals for companies in Luxembourg.

The proposal gathered the backing of more than the required 188 EU lawmakers in order to seek approval for a vote in the full European Parliament.

“An inquiry committee is the most powerful tool available to the EP and can investigate breaches of EU law by member states,” Sven Giegold, a German member of the Greens in the Parliament, said on his website yesterday. It will ensure EU lawmakers “have sufficient resources for such an investigation, as well as access to the necessary documents.”

The revelations last year of thousands of pages of secret tax deals with companies from around the world, including PepsiCo Inc. and Walt Disney Co., has shaken Luxembourg. In the wake of the disclosures, the European Commission widened its request for full lists of companies that obtained tax rulings between 2010 and 2013 to the entire EU.

Luxembourg is among countries that have come under pressure amid a global push to fight tax evasion and tax fraud. Last year, the country announced plans to abandon its long practice of offering bank secrecy and switch to a system of automatic exchange of tax information starting this year.

Amid a push to repair “reputational damage,” Luxembourg has vowed to rein in sweetheart tax deals, the country’s finance minister, Pierre Gramegna, told Bloomberg News in an interview last month. One measure will be a new law that will make “the tax ruling procedure clear and predictable,” Gramegna said.

28,000 Pages

The revelations of 28,000 pages of leaked documents by the International Consortium of Investigative Journalists that showed international corporations effectively lowered their tax bills to less than 1 percent of profit in Luxembourg also threw the spotlight on Jean-Claude Juncker, the nation’s prime minister for almost 19 years until 2013, who is now president of the European Commission.

Juncker, who took up his post at the Brussels-based commission in November, said he had no involvement in the deals during his time as finance minister or premier of the nation. The commission is the 28-nation EU’s regulatory arm.

“We’re not an enemy of Mr. Juncker. We are an enemy of tax evasion,” Philippe Lamberts, a Belgian member of the Parliament’s Greens group, told reporters in Strasbourg, France.

The commission’s antitrust department is conducting investigations into Luxembourg’s taxation of Amazon.com Inc. and Fiat Finance & Trade, Irish tax deals with Apple Inc. and the Netherlands’ treatment of Starbucks Corp.