Fight against ‘aggressive tax planning’ key issue for EU, says Rehn

The fight against aggressive tax planning by multinationals will be one of the "key issues" for the European Parliament over the next five years, EU economics and monetary affairs commissioner Olli Rehn has said.

Speaking at an event hosted by European Movement Ireland and BDO in Brussels yesterday, Mr Rehn, who was elected as an MEP for Finland in last month's European elections, said the European public had sent a clear message on the issue during the elections.

Unifying message

“If there was one unifying message in the European elections, at least based on my campaign trail, . . . [it] is that we have to continue to act intensively against tax fraud, against tax evasion and against aggressive tax planning by multinational corporations.”

While declining to comment on the details of Wednesday's announcement by the European Commission that it is investigating the Republic, Luxembourg and the Netherlands about tax arrangements entered into with specific companies, Mr Rehn welcomed the move. "I think it is very important that the commission has acted here," he said.

“In the European Parliament in the next five years this will be one of the key issues and will be one of the key challenges for the commission.”

Tax inquiry

Mr Rehn was speaking to representatives of the Irish and European business and political communities a day after the commission launched an inquiry into tax rulings offered by the Republic, Luxembourg and the Netherlands to three companies – Apple, Starbucks and Fiat. The commission is examining transfer-pricing arrangements entered into by the tax authorities to check their compliance with EU state-aid rules.

The outgoing commissioner, who was one of the key figures in handling the euro zone crisis and the design of the Irish bailout, praised the “strength and stamina” of the Irish people.

But he said challenges remained for the Irish economy, including the State’s high public deficit and debt levels, and the need to address the problem of non-performing loans in the banking sector. Structural reform in legal services, labour market policy and healthcare were also needed, he said.

Mr Rehn, who is expected to gain a senior role in the European Parliament, disputed the notion that the EU’s economic model had been one of austerity, arguing it had balanced fiscal consolidation with a commitment to encourage medium-term economic reform.

He acknowledged the need for “democratic legitimacy” in terms of the EU’s economic policy. Last month saw a strong surge in support for anti-austerity parties across the EU.