Substance over Form: EU leaders pay lip-service in Tax Avoidance Summit

Source: Dr Marilyn Mifsud¸ PKF Malta¸ May 2013

The EU leaders’ summit which took place on the 22nd May 2013 had two major topics on its agenda¸ Energy policies and Tax Avoidance. Although in all fairness the summit was initially intended to tackle energy issues exclusively¸ once the rampant tax scandals made their way into the agenda by way of combating the same¸ expectations were high¸ grudgingly becoming higher than were in fact met.

Austria and Luxembourg¸ while pressured to concede to expanding measures of exchange of information which is now being pushed into the realm of automatic exchanges¸ still did not pledge in irrevocable terms their commitment as fears of their later non compliance were expressed by Jose’ Manuel Barroso.

Collectively¸ the French Budget Minister’s secret bank account in Switzerland and the gross tax avoidance perpetrators Starbucks¸ Amazon and Google seemed to have left a more lasting impact on the internet than on the European leaders as essentially while the problems were acknowledged they failed as yet to be effectively addressed as MEP’s were reportedly ‘underwhelmed by the results of the Council[1]’. Additionally¸ while secret Swiss accounts were heinously condemned¸ adopting stricter exchange rules which would in turn gratuitously grant a slab of competitive advantage to Switzerland was not readily on either of the Austrian or Luxembourgeois cards. Ultimately it appears that the initially intended topic of energy prices did not relinquish its coveted ‘headlining spot’ in the discussions and for tax avoidance the next hope becomes the G8 summit to be hosted by UK’s David Cameron next month. In order to forestall putting a damper on the same in advance¸ confidence must be placed in Cameron’s words as opposed to those of his critics.