Survival of the Richest

Report findings
Aggressive tax planning structures
A study of the number of structures in the legislation of
EU Member States, which can facilitate aggressive tax
planning by multinational corporations, showed that there
are a great number of very diverse problems on this front
across the EU. When it comes to the harmful practice known
as patent boxes, the dramatic increase which was seen in
2015 has now stabilised. 2016 has been the year when many
political announcements to introduce patent boxes were
turned into concrete legislation. In total, patent boxes now
exist in over 40 per cent of EU Member States (12 countries,
including Belgium, France, Ireland, Italy, Luxembourg, the
Netherlands, Spain and the UK).
Tax treaties
European governments continue to sign very problematic
tax treaties with developing countries. An analysis of the
countries covered by this report shows that they on average
have 42 treaties with developing countries, and that these
treaties on average reduce developing country tax rates
by 3.8 per cent. Of all the countries analysed, Ireland has
on average introduced the highest amount of reductions
of developing country tax rates – 5.2 percentage points.
Analysis by ActionAid has also revealed that even among
the countries that do not, on average, have treaties which
impose high restrictions on developing country taxing
rates, there are a significant amount of ‘very restrictive’ tax
treaties, which impose strong constraints on the individual
developing countries that have signed them. Among the
countries covered by this report, Italy, the UK and Germany
are the countries with the highest amount of those very
problematic tax treaties with developing countries.
Global solutions
The vast majority of the countries covered by this
report remain opposed to the proposal to create an
intergovernmental UN tax body, which would grant
developing countries a seat at the table when global tax
standards are negotiated.
A former champion – Norway – has fallen silent on
the issue, but the European Parliament has remained
progressive, and repeatedly called for an intergovernmental
UN tax body to be established.
Some governments might have thought that this issue
would fall off the international political agenda, after a
dramatic year in 2015, when developed countries managed
to block a strong push from developing countries to get an
intergovernmental UN tax body. However, the developing
countries are showing no intention to let this issue go.
During the UNCTAD 14 negotiations in July 2016, the
discussion re-emerged and once again became a central
point of disagreement between developed and developing
countries. And in September 2016, Ecuador announced that
this would be one of their key priorities when they take over
the chairmanship of the G77 – a coalition of more than 130
developing countries – by January 2017.
36 • Survival of the Richest