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94 • Fifty Shades of Tax Dodging Spain last year implemented the European Capital Requirements Directive IV, which requests banks to make a public report on a country by country basis. 1072 Currently only one major bank, Banco Santander, has published the complete country by country report information, 1073 while two others – BBVA and Banco Popular – have published incomplete versions of it. 1074 Ownership transparency Spanish legislation includes a register of beneficial ownership of companies, foundations and trusts, but it is not open to the public. 1075 Although the EU’s Anti-Money Laundering Directive allows for wider public access to the register than those who can demonstrate a legitimate interest, the Spanish government has not yet made any decision about whether or not to allow for this. 1076 In negotiations about the beneficial ownership register, the Spanish stance was very strongly in favour of not making the registers public. 1077 EU solutions Prior to the European Summit in December 2014, the Spanish President wrote a letter to the President of the European Council asking for “effective tools at the European level to tackle tax fraud and evasion.” 1078 Spain supports further coordination of EU corporate tax policies through the Consolidated Common Corporate Tax Base (CCCTB) proposal, and supports making it mandatory for all multinational companies in all Member States. 1079 Furthermore, the EU’s Code of Conduct on Business Taxation is seen as effective by the Ministry of Finance, although they acknowledge there is room for improvement in its functioning, rules and mandate. 1080 Global solutions Although the government is awaiting the final content of the OECD BEPS recommendations, the Ministry of Finance reports that the intention of Spain is not to deviate from the conclusions that will be reached. 1081 This is consistent with Spain’s plans to follow the OECD BEPS recommendations for country by country reporting, as described above. Regarding the creation of an intergovernmental tax body under the auspices of the UN, the Spanish position – when this issue was discussed between the EU countries – was that its establishment should be properly studied prior to any decision. 1082 In parallel, the Spanish government kept the position that the current UN Tax Committee should at least be reinforced in order to accomplish its mission better. 1083 During the negotiations at the Financing for Development conference in July 2015, the Spanish government followed the joint EU position, 1084 which considered the establishment of an intergovernmental body to be a ‘red line’. Conclusion The Spanish tax system includes some regimes that could facilitate tax dodging and the government is unfortunately not showing the will to tackle these issues, with the largest corporate tax reform of the previous year instead focused on lowering tax rates. There are indications that the government has a particular blind-spot when it comes to the potentially harmful impacts of its tax system on developing countries. This was symbolised in the last year by new tax treaties with Nigeria and Senegal with significantly reduced tax rates, and the government’s approval of a special regime for the Canary Islands that will allow investors in West Africa a low-tax platform. When it comes to transparency measures that could assist developing countries, the Spanish government has also taken less than helpful positions, having decided not to make country by country reporting public and also working against public registers of beneficial ownership information. In general, the position of the Spanish government seems rather reactive to public opinion as well as to EU and international processes. Meanwhile, public opinion is getting less tolerant of tax scandals and, with elections coming up this year, change could be expected.
Fifty Shades of Tax Dodging • 95 Sweden “Tax flight is an example where civil society organisations have shown that ten times as much money disappears from the developing countries than what we give in aid through tax flight. Of course this is something we really have great use of, this type of information and debate.” Isabella Lövin, Minister of International Development Cooperation at the Ministry of Foreign Affairs, Sweden 1085 General overview In September 2014, Sweden held elections and changed to a Socialist-Green led government. The new government has not offered any visible changes to the country’s stance on tax justice or provided any major changes on corporate tax in their first budget. Since the new government came into office, ministries have taken many opportunities for dialogue meetings, consultations and seminars with civil society. In early June 2015, the Swedish Parliament held a seminar on capital flight, addressing the challenges and possibilities of Base Erosion and Profit Shifting (BEPS) and other global and European initiatives. The LuxLeaks and SwissLeaks scandals did not go unnoticed in Sweden. In fact, the media coverage attracted major attention with headlines such as “Sweden loses millions in tax planning in Luxembourg.” 1086 According to documents from the LuxLeaks scandal, there were 26 companies with ties to Sweden out of 343. The most prominent Swedish companies included IKEA, Tele2, EQT and SEB. Consequently, the French news magazine Le Monde described IKEA as the “world champion in optimising its tax burden.” 1087 IKEA did not respond to any of the leaks and refused to appear at the European Parliament hearing about LuxLeaks. 1088 Similarly, SwissLeaks publicly exposed almost 500 account holders, including famous Swedish football players, who have tried to hide their identities through anonymous accounts and letterboxes in tax havens with help from HSBC Bank. 1089 Primarily, the debate after LuxLeaks and SwissLeaks has been on Swedish companies’ tax planning and their responsibilities beyond the legal requirements or laws. 1090 Swedish companies have slowly started to work strategically on corporate social responsibility (CSR) and adopting CSR policies. According to web rankings by Comprehend, only three out of 100 Swedish companies see tax as a CSR issue and seven companies have tax listed as a responsibility issue on their website. There is similarly low attention paid to transparency, with only three out 100 companies in Sweden using any form of country by country reporting. 1091 Tax policies In Sweden, there are big ambitions to strengthen the fight against tax evasion and tax fraud. The Swedish government frequently highlights that acting against tax dodging is one of its priorities, often related to Financing for Development. However, there is a sense that the fight mostly consists of public speeches and articles debating the issues. 1092 The General Anti-Avoidance Rule (GAAR) in the Act Against Tax Evasion has been in force since 1995. The Ministry of Finance proposed an extension of the GAAR in early 2015, but the proposal was set aside as the Ministry stated it is “no longer relevant”. Instead of extending the application of GAAR, there is a proposal to make an amendment to the anti-avoidance rule in the Act on Withholding on Tax. 1093 Tax rulings Sweden does offer tax rulings to multinational companies, including Advanced Pricing Agreements (APAs) based on legislation that took effect in 2010. The Ministry of Finance (MoF) does not want to disclose the number of rulings, nor give comments on the Swedish position of making tax rulings publicly available. 1094 Data from the European Commission shows that Sweden only had one APA in force at the end of 2013, which was with a company based in an unknown non-EU member state. According to the Commission, the APA took 40 months to negotiate. 1095 This indicates that Sweden’s APA system is still in fledgling form. However, the data from the Commission also shows that Sweden received nine requests for APAs in 2013 alone, 1096 indicating that the number of rulings in place might have increased since the end of 2013. In its submission to the European Parliament’s special committee on tax rulings (TAXE), the MoF stresses that, according to Swedish law, APAs can only be entered into through bilateral or multilateral negotiations with countries that Sweden has a tax treaty with. According to the Ministry, this ensures that Sweden’s rulings do not contain “arbitrary and selective assessments.” 1097
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