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Tax Justice Network

TJN

The Tax Justice Network (TJN) is an independent international network.

Lobbying Activity

Meeting with René Repasi (Member of the European Parliament, Rapporteur) and Österreichischer Gewerkschaftsbund and

25 Sept 2025 · Lunch Debate '28. Regime'

Meeting with Evelyn Regner (Member of the European Parliament) and EUROPEAN TRADE UNION CONFEDERATION and

25 Sept 2025 · Debate 28th Regime

Meeting with Fabio De Masi (Member of the European Parliament) and Transparency International Liaison Office to the European Union and The Daphne Caruana Galizia Foundation

20 May 2025 · Preparatory meeting FISC mission to Abu Dhabi and Dubai

Meeting with Bruno Gonçalves (Member of the European Parliament)

18 Feb 2025 · FISC policies

Meeting with Rasmus Andresen (Member of the European Parliament) and Bundesverband der Deutschen Industrie e.V.

18 Feb 2025 · Taxation

Response to Evaluation of the Anti-Avoidance Tax Directive (ATAD)

11 Sept 2024

The ATAD is a crucial piece of legislation in the fight against tax avoidance and the eradicating of base erosion and profit shifting involving EU countries. However, on a number of aspects, the current Directive is underperforming. We therefore seize the opportunity granted by the EU Commissions fitness check of the ATAD to highlight a number of flaws of the Directive and to recommend solutions. on how to remedy the flaws. In the attached report, the following recommendations are made. With regard to CFC rules, a renewed ATAD should phase out transactional CFC regimes (Model B). Non-transactional CFC regimes (Model A) are superior in achieving their purpose while avoiding discretionary loopholes, and this is also confirmed in recent country practice. However, non-transactional CFC regimes suffer from the lack of a harmonized and discretionary (yet compulsory) substance carve-out. Under a revised ATAD, the substance carve-out should be tightened and its application mechanised by the insertion of clear parameters to identify economic substance. The discretionary application of the current carve-out is not a proportional and transparent measure to further the goal of safeguarding only genuine economic activity. As to the interest limitation regime of the ATAD, it is clear that the current rules are not respecting international recommendations of good practice. A 30% EBIDTA deduction threshold is only acceptable if it comes with other restrictions, namely the omission of the group ratio rule or the addition of other interest deduction limitations. None of this is currently included in the ATAD. Amendments should be made which either lower the general EBIDTA threshold or make it conditional to other measures. Furthermore, the grandfathering option for old loans should be abolished as practice in certain countries shows that this temporary exemption is turning into a permanent loophole. Finally, the deduction limitations on intra-group payments of royalties and services fees are important anti-avoidance tools that are used by a growing number of EU countries, as confirmed by the EU Code of Conduct Group. For the purpose of making such measures compulsory across all EU member states while at the same time harmonizing their scopes, these measures should also figure in the ATAD. Unlike what EU countries are currently doing, such deduction limits should not make use of lists of un-cooperative jurisdictions as such practice is both inefficient and inappropriate. Rather, deduction limitation rules should be devised which rely on objective parameters, like deduction in function of an EBITDA threshold, turnover, taxable income or level of taxation on the side of the recipient.
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Response to Business in Europe: Framework for Income Taxation (BEFIT)

24 Jan 2024

In the attached report, the Tax Justice Network analyses whether the BEFIT directive proposal of September 2023 delivers on the European Commissions own brief for Business Taxation for the 21st Century. The Comission presented the BEFIT initiative as a plan to provide for a fairer allocation between Member States of taxing rights on the profits made by multinational enterprises active in the EU. After analysis of the main aspects of the proposal in light of the Tax Justice Networks views on unitary taxation with formulary apportionment, a number of significant flaws in the BEFIT proposal are highlighted. Recommendations are made on how the proposal can be improved on these selected points. In brief, the current BEFIT proposal would essentially move to a system of unitary taxation without formulary apportionment. As such, unlimited group loss consolidation which is inherent to unitary taxation is the proposals only tangible contribution to the corporate tax rulebook in the EU. This generates a major tax cut. With no clear roadmap towards the introduction of formulary apportionment to replace the transitional allocation regime based on the anachronistic arms length principle, the BEFIT proposal at is stands is entirely unfit for purpose. We recommend three main changes to put BEFIT back on the right track. Most importantly, group loss consolidation should not be implemented without the simultaneous introduction of its corollary of formulary apportionment. A two-factor (employees and sales-by-destination) formula would provide for equitable and simple attribution of profits, with substantial revenue gains for many Member States. Second, we recommend specific anti-avoidance provisions, limitations on loss carry-forwards and limitations to the administrative transfer pricing safe harbour rules, to make BEFIT more resistant to tax abuse. In addition, the European Commissions 2018 work on significant digital presence provides the basis for a new rule to allocate a share of BEFIT group profits to EU member states with significant sales-by-destination or users, even if the multinational enterprise in question does not have taxable presence in the jurisdiction in the traditional sense. Third, we propose the Commission enforces the current tax expenditure transparency requirements and adopts a general recommendation on the appropriate design and use of corporate tax incentives, in order to make sure that Member States policies contribute to the general purpose of sustainable and environmentally responsible development. The Tax Justice Network strongly believes that changes to the proposal are needed to make BEFIT both politically acceptable as well as fit for purpose in light of the Business Taxation in the 21st Century strategy.
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Meeting with José Gusmão (Member of the European Parliament, Shadow rapporteur)

12 Dec 2023 · FISC: BEFIT and Transfer Pricing

Response to Strengthening existing rules and expanding exchange of information framework in the field of taxation (DAC8)

30 Mar 2023

In response to the public feedback requested by the EU Commission in relation to its Tax fraud & evasion strengthening rules on administrative cooperation and expanding the exchange of information initiative, the Tax Justice Network makes a number of recommendations to improve the recently proposed crypto reporting rules under the directive on administrative cooperation DAC8 Proposal. The rules proposed under DAC8 should be expanded to cover crypto-asset service provider reporting of not just EU resident but also non-EU resident customers. This so-called wider approach makes sense not just from a service provider perspective but should also be extended to a wider-wider approach. Such approach would allow both the publication of statistics on third country crypto-activity hosted by EU crypto-asset service providers, as well as allow spontaneous exchanges of information between EU member states that host service providers and third countries with a significant number of clients with the EU providers. Lastly, the DAC8 rules should be amended to better deal with the rising phenomena of self-hosted wallets and decentralised exchanges. Suggested approaches involve compulsory declaration of self-hosted wallets, an EU wide crypto-asset registry and registration of decentralised applications with crypto-asset service provider functionality. Recommendations are also made regarding the general improvement of the directives framework. First of all, there is the clear need for the publication of statistics regarding the effective flows of information on financial accounts under DAC2 (and crypto-assets under DAC8 in the future). Furthermore, the directive framework could be more effectively used by adopting strategies to use automatic exchange of information data to map techniques used for offshore wealth holding. Loopholes created in the common reporting standard by the US tax regime should be filled by combining automatic exchange of information data and beneficial ownership data. Finally, both DAC2 and DAC8 data received by EU Member States should be allowed to be used for purposes that go beyond the enforcement of tax laws, like anti-money laundering and anti-corruption.
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Meeting with José Gusmão (Member of the European Parliament)

24 Mar 2022 · Minimum taxation

Meeting with Clare Daly (Member of the European Parliament, Shadow rapporteur)

10 Feb 2022 · AML Package - Parliamentary Assistant meeting

Meeting with Maria Elena Scoppio (Cabinet of Commissioner Paolo Gentiloni)

13 May 2020 · the European Commission’s future work on direct taxes

Response to Action Plan on fight against tax fraud

1 Apr 2020

With the Corona pandemic exacerbating inequalities and ushering in extreme stress on the budgets of EU member states, the Action Plan of the European Commission is planned during the most severe crisis of the European and global institutional architecture in 70 years, exposing hundreds of millions of citizens inside and outside the European Union to extreme economic vulnerability. In this context, the role of corporate tax havens and secrecy jurisdictions within and outside the EU in undermining solidarity cannot be tolerated any longer and calls for decisive action in order to safeguard the European Union’s cohesion and help preventing the further spread of populist and extremist movements. The scope of the EU Action Plan should be broadened to include personal and corporate income tax matters, including tax avoidance in a legal grey zone. Options for an EU supported wealth tax and options for an excess profits tax on firms profiteering from Corona should urgently be explored and included in the Action Plan, jointly with reviving plans for a broad and comprehensive tax on financial transactions. The EU would benefit from the European Commission hosting or acting as a European Tax Intelligence Centre (EUTIC), transmitting innovative data and policy analyses for improved tax compliance and fairer taxation. Among others by applying a novel geographic risk assessment tool, EUTIC would assess vulnerabilities to illicit financial flows in Europe including from tax evasion, tax fraud and tax avoidance. A more detailed proposal for scope and data implications of an EUTIC are enclosed in the draft summary recommendations of the Horizon 2020 research project “COFFERS” (Combating Fiscal Fraud and Empowering Regulators). This project has concluded end of January 2020 and offers a wide range of relevant research findings and innovative policy recommendations (full details accessible under http://coffers.eu). While the European Union has taken many bold legislative steps in the past years, some policy gaps remain that need addressing. In the realm of automatic information exchange of financial account information and personal income and wealth taxation, the effectiveness of the entire system is jeopardised by recalcitrant jurisdictions that refuse to engage in fully reciprocal information exchanges. To ensure a level playing field, the EU should consider implementing a withholding tax policy against non-participating banks that fail to provide financial account data on a fully reciprocal basis, using its market access as a leverage to ensure compliance. Furthermore, the validity of passports issued under golden passport schemes by some members states should be constrained in order to prevent tax evaders and criminals to open foreign bank accounts with purchased citizenship to circumvent reporting to tax authorities at their place of primary residence. The efforts to counter tax evasion and money laundering through beneficial ownership disclosure need to be complemented by disclosure of legal ownership in all cases, by expanding the disclosure to EU real estate and the registration to freeport users, and by abolishing bearer shares or immobilising them with a government authority. In order to rein in corporate tax havens, various conditions for participating in the Single Market should be enacted, ensuring a level playing field and robust tax revenues: group-wide public country by country reporting, full publication of unilateral cross border tax rulings including the name of the companies and minimum corporate tax rates. Other policies to consider are discussed in the current special issue of “Intertax”: Leyla Ates, Moran Harari and Markus Meinzer, ‘Positive Spillovers in International Corporate Taxation and the European Union’, Intertax, 48/4 (2020), 389–401). Full details of reform options are detailed in the 20 indicators of the Corporate Tax Haven Index: https://www.corporatetaxhavenindex.org/methodology/haven-indicators
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