Moscovici: Trump’s US could be tax haven blacklisted

Pierre Moscovici said that the US is “the single most important source of uncertainty”. [European Commission]

EXCLUSIVE / The EU’s tax haven blacklist is taking shape, as the European Commission uses the momentum generated by the LuxLeaks and Panama Papers scandals. Tax Commissioner Pierre Moscovici did not rule out including the United States on the list, in an interview with

Pierre Moscovici has refused to rule out any country being condemned to the EU’s forthcoming tax haven blacklist, including the US, which will soon be led by President-elect Donald Trump

Trump was the first presidential candidate since Richard Nixon not to release his tax returns, offering up a litany of excuses that his accounts were “too complicated”, incomplete or that he couldn’t because he was still being audited. Before the event, Moscovici called the billionaire a “populist provocateur”.

The EU’s tax chief also outlined his vision for country-by-country reporting and his proposal for a Common Consolidated Tax Base.

Pierre Moscovici is European Commissioner for Economic and Financial Affairs, Taxation and Customs.

He spoke to EURACTIV’s James Crisp at the Development Finance Institutions and the Responsible Tax Agenda event, hosted by Oxfam IBIS and the European Network on Debt and Development. You can listen to the interview on SoundCloud here.

Could any country hypothetically end up on the EU’s tax blacklist? After all, we now have a US president in waiting who infamously refused to publish his tax returns. Could you envisage seeing the US on the list?

I’m not going to say who will be on the blacklist, because we are only just starting the process. I’ve already said that the purpose of the list is that no one is on it, so that standards are implemented before it comes to that.

But every country, potentially, has to fulfill the criteria. We didn’t start with a pre-list of member states, we started with the criteria.

The president-elect can consider himself warned then.

Well, he refused to give up any information and that didn’t change the outcome of the election. Strange country, where you can avoid any taxation.

It would be great to get him on the list!

I’m not promising that! We need some political adherence after all.

Socialists and Democrats: Trump is dangerous

The results of the US election show the need for the EU to start focusing on its own interests, Knut Fleckenstein, vice-president of the Socialists and Democrats group (S&D), told

If a country is blacklisted, will that affect its ability to access development funds from, for example, the European Investment Bank (EIB)?

That’s a point that we have to discuss. The process has only just started, the first stage was establishing vigorous criteria and which are transparent of course. The discussion started in the ECOFIN council on Tuesday (8 November); it was quite positive. There are, of course, some tendencies there to be cautious, but my objective is that this list will exist before the end of 2017. I think that the EIB’s task is to contribute to the integration and balance the social cohesion of the EU. It is not independent like the ECB and it has to adhere to EU policy objectives, including fair and transparent taxation.

So the EIB has a role in setting an example?

Yes, it has a role in promoting implementation of tax standards. We are in close discussion with them, especially on the alignment of EIB policy with international developments in this area.

Country-by-country reporting, the new package, it’s not actually full country-by-country reporting, is it?

Well, it is, in that we have it among administrations. The next step that I am fighting for is public country-by-country reporting. We’ve gone for a pragmatic approach to this. To be clear, some colleagues in the Commission, for reasons I can’t understand, are against this transparency of CBCR. They were arguing that there could be a contradiction between investment and transparency and that this could damage the competitiveness of our firms, in the absence of reciprocity. This Commission is all about transparency, but it is also about competitiveness, growth and jobs.

Country-by-country reporting to affect only 10% of multinationals

The European Parliament has adopted a draft directive that would see 90% of multinational companies escape compulsory country-by-country reporting requirements. EURACTIV France reports.

But the banks already have that.

I know, I was the first, as finance minister of France, to propose a bill that established this publishing without any damage to the banking sector. That’s why I was more than comfortable arguing against claims of a contradiction. Finally, the whole Commission is in favour of this. We tried to build something that is pragmatic and shows the activities of multinationals operating inside the EU. It should also be there for their activities inside tax havens. We have asked for global data, considering that we do not have the capacity to legislate for the rest of the world.

I know it is not totally satisfactory for some MEPs or even you, but I think we have made tremendous progress. Optimistically, this is revolutionary for the EU, it will make us the only economic region in the world to implement this. If I had proposed more, I would have not had a chance of getting it approved.

As a Commissioner, when I am considering proposing a new tax, I always ask myself two things: first, should we do this? Second, is it feasible? We always try to find the most ambitious, possible compromise. If my proposals had disregarded any attempt to find consensus, then everyone would have been satisfied with just the proposals, but there would have been no outcome. I would prefer to give you results.

Your job is particularly difficult, because of the need for unanimity. Are there any countries that are making things particularly hard for you? You can spill the beans, you are among friends here…

I know now that any meeting, even one among friends, means I need to be careful. Thank you, social media! I’m not going to name them, but you know who the usual suspects are. But, to be fair, those usual suspects are sometimes in an agreeable mood and our traditionally supportive partners sometimes are less cooperative.

NGOs reveal extensive use of tax havens by French banks

The public country-by-country reporting imposed by Paris on France’s big banks has revealed that they channel more than a third of their profits through countries with advantageous tax laws, a group of  NGOs have found. EURACTIV France reports.

How can development finance institutions support the fight against tax dodging, while also promoting domestic resource mobilisation?

I believe that we have to be conscious that we have to have a global approach. This has to be implemented at EU level, but discussed at a global one. When we discuss this at the G20, with the IMF, with the World Bank, the EIB, it is clear that we need a global and integrated approach.

Some argue that the OECD isn’t inclusive enough and that something based in the UN would be more appropriate.

The OECD has played a very positive role, which has to be acknowledged. But there are limitations. It is limited by its own stakeholders. We always cooperate well with the OECD, but to be frank, the EU needs to lead and is more ambitious than the OECD. And we are only going to get more ambitious, as shown by the listing process. The second limitation is that the rest of the world, especially the developing countries, is not included in the OECD. I’m not sure that the UN has the relevant structures to address that. The plus points of the OECD is that it is operational and can be directed by the G20. All-in-all, that’s the place to be.

We are still eagerly anticipating the EU legislation on BEPS (base erosion and profit shifting). When can we expect to see it and how is it looking?

We are going to implement BEPS, all BEPS and more than BEPS. And it is going to be now. The Dutch Presidency adopted our proposal on the ant-tax-avoidance directive, which is going to be implemented inside the EU, but its positions are also going to be implemented in other countries. That’s why I am, as you know, proposing another project: the Common Consolidated Tax Base. Within that framework, we are going to extend BEPS plus, as we call it, to the rest of the world. We have good momentum at the moment, so we have to take advantage. What I fear, is that the momentum vanishes and that the traditional behaviours of some member states, or even all of them, could reemerge. That’s why we have to work together.

OECD promises to end era of tax evasion

The OECD hopes its plan to combat tax evasion will mark the end of an era. But NGOs have criticised its lack of ambition. EURACTIV France reports

We need more LuxLeaks and Panama Papers to prolong the momentum then?

Don’t try to provoke that! If we are idealistic, which I like to think I am, we have to imagine a world where those scandals aren’t possible, because the causes of those scandals disappear. Those cases create things like populism. Scandals are never an asset for the public conscious. For those that try to push forward ambitious proposals, the momentum they create is admittedly helpful, but I would prefer the support of NGOs and stakeholders any day.

Panama Papers committee courts public opinion to exert pressure

The European Parliament’s Panama Papers inquiries has invited the journalists that first published the leak to its first hearing, in a political charged move against a “system that many European countries are involved in”. EURACTIV Germany reports.


Subscribe to our newsletters