Euro parliament threatens banks using tax havens

| 11/03/2011

(GFSNews):Bank licenses should be withdrawn from financial institutions operating in offshore tax havens, according to a resolution adopted by the European Parliament. In a vote on Tuesday, MEPs voted in favour of a clampdown on tax havens and transfer price "manipulation" by multinational companies. Parliamentarians agreed with a development committee report that companies should be forced to pay tax in countries in which profits are made, rather than in remote low-tax offshore destinations. The vote, following explosive "Weapons of Mass Distruction” remarks by report author Eva Joly calls for measures to bar companies from "transferring their profits to countries with the most favourable tax regimes".

n a plenary debate, the French MEP claimed that tax havens are "weapons of mass destruction" – reducing fiscal revenues and aiding economic crime – that should be closed down, as she slammed the tax practices of European companies.

"We need to make sure that profits are not manipulated – that transfer pricing is fair. Look at what has been done inter alia by European companies – theyare really abusing the system as it currently is," Joly said.

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  1. Anonymous says:

    I am always amazed at how much governments and parliaments always blame others, when it is obvious that their own system is faulty. High taxes (added together often above the 50% mark) and inextricable tax laws are sure to push companies and people away to other places. All serious studies show that "tax havens" overall benefit the high-tax countries, and those with good ties to low-tax, low red-tape countries benefit from them. There arer numerous examples of cases where an increase in taxation reduces tax revenue and reductions in taxation increases tax revenue. Why can’t governments and parliaments learn from facts? Noble Prize winners (don’t remember who) in economices once showed that the optimal tax rate is a bit below 20%: high enough to generate revenue, low enough so that people work more, have no incentive to cheat and little or no incentive to avoid taxes).

  2. Anonymous says:

    This is a question of Europe’s tax laws, not the Caymans’. If they want to tax their citizens for overseas income, all they need is to change their tax laws. It’s just continental Europe trying to make everyone else pay for their socialist policies.