Thread by @alexcobham

Results in: the court overturns EC finding of Luxembourg state aid to Amazon...

https://twitter.com/EUCourtPress/status/1392413488883044354

While confirming Lux state aid to Engie...

https://twitter.com/EUCourtPress/status/1392408852319117313?s=20

Meh.

What does this mean? Not much, arguably. State aid rules have always been a blunt tool to stop the abuse of EU tax havens, and these findings simply confirm that.

It looks like Lux won't have to tax Amazon EUR250m, and may have to tax Engie EUR120m. But none of that comes anywhere near the US$9 billion of corporate tax losses that Luxembourg imposes on other countries iff.taxjustice.net/#/profile/LUX

Luxembourg ranks 6th in our Corporate Tax Haven Index, and is one of *the* most committed jurisdictions in the world, in terms of procuring profit shifting at the expense of all other cthi.taxjustice.net/en/

None of Luxembourg's abuses, including secretive tax rulings for favoured multinationals and their big four accounting firm advisers, will get fixed through the state aid rules. They may rein in some excesses, but the substantial issue will remain.

How does this get fixed? Two main things, both open to the EU (and the OECD) - but both requiring commitment of major member states, which currently is in question...

First, make profit shifting much harder by changing the basis of international tax rules to a unitary approach that assesses the *global* profit of multinationals, and shares them as tax base between countries according to where the real activity is- not dodgy arm's length prices

The proposed Common Consolidated Corporate Tax Base (CCCTB) would deliver on this - but agreement has from member states has been hard to find, because the multinational lobbyists know how much it would cost them.

The other element is the introduction (at EU level or wider) of a minimum effective tax rate (the METR is our alternative to the OECD's complex and internationally regressive pillar 2 proposal). taxjustice.net/press/biden-ta…

The difficulty here, again, is that France and Germany are lukewarm at best. Why? Not because they wouldn't like Luxembourg et al to stop robbing their tax revenues exactly, but more because their own multinationals remain fiercely opposed to paying their fair share.

OECD work to curb profit shifting has failed, since its inception in 2013, to deliver any significant progress: in the first phase, because major members insisted on keeping the arm's length principle; and now, because UK (+EU others?) are blocking Biden ambition of 21% minimum.

In any event, state aid rules are not the answer to the aggressive and anti-social behaviour of Luxembourg, Netherlands, Ireland and others in procuring profit shifting tax abuse at the expense of their neighbours. Those neighbours need to act - but that means overcoming lobbying