PM calls for international action against tax havens

Poland’s Prime Minister Mateusz Morawiecki has criticised the lack of action against tax havens by the international community in an opinion piece published by the French daily “L'Opinion” on April 30th.

The Prime Minister wrote that “it is time to coordinate legislative measures that will stop multinational corporations from abusing the tool of international tax optimisation, which according to the prime minister puts middle-class families in an unfair position when juxtaposed with the privileges enjoyed by large corporations.”

The debt COVID-19 pandemic in Western Europe has significantly changed the situation, more and more people are realising the need to build a new global financial order, the PM wrote.

“We are starting a debate about international taxation, about whether corporations should pay taxes where they generate revenues. We are asking the question about whether it is fair that in some EU countries it is possible to pay no taxes at all. These topics have not been taken seriously until now,” he believes..

The head of the Polish government further emphasised that there is a problem of international tax optimisation, exemplified by the fact that the European Commission lost a court case in 2020 which means that Apple, the IT giant will not have to pay Ireland EUR 13 bn in back taxes. The prime minister argued that this shows that courts, even European ones, ““do not always follow the spirit of justice.”

Pointing to his government’s policy of reducing VAT and CIT tax loopholes as “a new iteration of executive power seeking to strengthen the state,” the Polish PM laid forward the argument for why such policies help working families, stating that “a fair, pro-growth tax system can strengthen the Polish middle class.”

He also asked the question whether “it can be considered fair that a modest family running a neighbourhood store has to pay taxes while global Big-Tech giants do not?” The Prime Minister forcefully criticised international legislation which makes it possible for tax havens to continue their operations, writing that “tax havens serve to improve the performance of corporations, but they run counter to the most elementary principles of justice, depriving the communities where global companies make their money, of the taxes they rightfully deserve.”

The Polish PM pointed to the so-called “Lux Leaks” scandal as a turning point which initiated the struggle for a change to the laws that make it possible for tax havens to still exist in the EU.

The scandal revealed that more than 300 companies, including giants such as Apple, Deutsche Bank and IKEA, had registered special companies in Luxembourg between 2002 and 2010, which helped them avoid paying millions of euros in taxes in the countries where they made their profits.

Rounding up his opinion piece, the Prime Minister also called on member states of the European Union and EU institutions to coordinate legislation that will make VAT carousels more difficult to execute for the international gangs engaged in white-collar crimes.

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