EFFAT welcomes the EC decision whereby tax advantages granted to Starbucks in the Netherlands are unlawful. The decision confirms that multinational companies have been taking advantage of different legislations to shift their tax obligations. This has sparked a tax race to the bottom and unfair competition, depriving society of vital revenues for its public services.
As the main contributor to the Unhappy Meal report, which exposes the tax avoidance practices of transnational companies such as McDonalds’, EFFAT considers it outrageous that some major transnational companies pay less than 1% tax on huge profits, choosing preferential fiscal regimes with no link to where their offices are headquartered.
EFFAT Secretary General Harald Wiedenhofer reacted to the Commission’s decision saying that “This is finally a good step in the right direction. In times of austerity, when minimum wages and pensions are being decreased, tax dumping is just unacceptable, especially as some member states can afford to lower their corporate income tax because they receive EU subsidies. Multinationals like Starbucks have deprived public services of hundreds of millions. Profits need to be taxed in the countries where they are generated”.
EFFAT wishes to express its full support to the EP Socialist and Democrat Group which refused to hold a dialogue with representatives of multinational companies. The latter refused to appear before the Special Committee on Tax Rulings TAXE.
The institutions need to take immediate action to ensure that a fair system for company taxation across Europe is established in order to bring justice to its citizens.