STOP
1PeMYu1
1PeMYu1
You also want an ePaper? Increase the reach of your titles
YUMPU automatically turns print PDFs into web optimized ePapers that Google loves.
60 • Fifty Shades of Tax Dodging<br />
EU solutions<br />
France has the long-standing position as a champion of the<br />
EU proposal on a Common Consolidated Corporate Tax Base<br />
(CCCTB). Even before the many tax scandals hit France,<br />
President François Hollande publicly pledged to push for a<br />
European CCCTB by 2020. 503 Research published in July 2014<br />
by the French Conseil d’Analyse Economique (CAE) outlined<br />
the feasibility of a CCCTB starting with a harmonisation of<br />
the banking sector in a reduced number of EU countries. 504<br />
Finance Minister Michel Sapin also sent a letter co-signed<br />
by his German and Italian counterparts, pushing for further<br />
EU harmonisation. 505 Yet as the European Commission<br />
introduced a watered-down version of CCCTB as part of<br />
their package on fairer corporate taxation – lacking the core<br />
measure of consolidation – Sapin praised the EU for taking<br />
ambitious steps to reform the tax system. 506<br />
Following the Luxleaks scandal, the French government<br />
supported a first EU package on transparency allowing<br />
for the automatic exchange of tax rulings. Sapin was very<br />
vocal regarding the tax rulings granted by Luxembourg to<br />
companies, stating that “aggressive tax planning [was] not<br />
acceptable anymore” and the tax dodging was to be “tackled<br />
at the global stage.” 507 French authorities consider the<br />
EU package as sufficient proof of transparency, 508 despite<br />
the fact that only tax authorities would have access to the<br />
information, which would not entail any public transparency.<br />
The government has not indicated any willingness to push for<br />
further transparency or to go beyond EU initiatives. 509<br />
Global solutions<br />
Whether within the EU or on the international stage, in a<br />
few years France has changed from often taking unilateral<br />
actions to lead the way against tax dodging to becoming<br />
more passive. This has coincided with the OECD BEPS<br />
reform project, which France is warmly in favour of and<br />
which officials insist is the right forum for discussing tax<br />
issues. As such, France has been repeatedly pledging its<br />
support to the OECD and its BEPS action plan 510 and has<br />
expressed its intention to implement part of the BEPS<br />
outcome (including confidential country by country reporting)<br />
into law by the end of the year. 511<br />
Consequently, France is opposed to any UN initiative<br />
regarding tax and transparency, such as the creation of a UN<br />
intergovernmental tax body. This position has been repeatedly<br />
expressed during the international rounds of negotiations.<br />
Although the public explanation for such a position is that<br />
a UN initiative would be inefficient and would embody an<br />
“institutional proliferation”, 512 the actual reason seems to<br />
lie elsewhere: the creation of a UN tax body would shift the<br />
decision-making agenda away from the restricted OECD<br />
countries’ club, thus diminishing their power to shape the tax<br />
agenda. Furthermore, it might mean that decision making<br />
will no longer happen in Paris, where the OECD is based.<br />
During the Financing for Development Conference last<br />
July in Addis Ababa, France was one of the most active rich<br />
countries to block this proposition, and, curiously, seemed to<br />
be questioning multilateralism. Reflecting France’s view on<br />
the central role of the OECD when it comes to taxation and<br />
developing countries, the government remains one of the top<br />
funders of the OECD initiative Tax Inspectors without Borders<br />
(TIWB). 513<br />
Conclusion<br />
Numerous tax scandals involving multinational companies<br />
doing business in France were followed by sweeping<br />
declarations from the French Government. The time of tax<br />
dodging was “over” 514 for multinational companies that could<br />
not now “place themselves beyond this obligation.” 513<br />
Yet despite ambitious speeches, France showed little<br />
determination to tackle tax dodging at home and refused<br />
to push any legislation outside the EU and the OECD. This<br />
strategy often ended up in delaying – if not killing – the<br />
application of a fairer tax system, as exemplified by France’s<br />
attitude in the FfD negotiations around the UN tax body.<br />
The government’s argument for such a position has<br />
consistently fallen on protecting business interests. Any<br />
tax justice measure considered as harmful to the French<br />
business environment has been delayed. And in terms of<br />
the business environment, France is no amateur, granting<br />
large tax incentives to businesses – particularly for R&D.<br />
Despite large abuses of R&D tax incentives by multinational<br />
companies revealed by several institutional reports and<br />
investigations, the government seems unwilling to restrict<br />
access to R&D tax credits and flags R&D as one of the<br />
criteria of French attractiveness – at the potential expense of<br />
other countries.<br />
Once a leader in terms of promoting tax transparency in the<br />
EU, France has definitely taken a much more conservative<br />
approach over the recent year. Disappointingly, the Ministry<br />
of Finance has stated that it will neither implement fully<br />
public registers of beneficial owners nor support public<br />
country by country reporting unless other countries push<br />
for this. By taking such positions, there is a real sense<br />
that France is quickly losing its previous reputation as a<br />
champion of positive change on tax.