Exclusive Exclusive: Germany to Back G20 Tax Avoidance Rules, Defy E.U. Commission

Germany’s finance ministry is backing a series of globally-binding rules aimed at fighting tax avoidance by multinational companies but will oppose stricter regulations being proposed by the European Union’s executive arm, Handelsblatt has learned. A draft law for Germany, proposed by Finance Minister Wolfgang Schäuble and to be debated this spring, will follow the G20’s “Base Erosion and Profit Sharing” rules, which are more lenient than proposals by the Brussels-based European Commission to counter companies’ profit shifting and tax avoidance strategies, Michael Meister, a deputy finance minister, said during an exclusive Handelsblatt conference Thursday. “It’s hardly helpful if we in Europe now deviate from what has been agreed in the framework of the G20,” Mr. Meister said. The government’s main goal is to achieve a global consensus, according to Mr. Meister, who emphasized that India and China also abandoned plans for individual tax rules in the wake of the G20 agreement. “As an export-oriented country, we have to have an interest in global economic processes running smoothly,” he said. Pierre Moscovici, the E.U. commissioner for economic and financial affairs, including taxes, wants to introduce mandatory country-by-country reports of companies’ profits and tax payments in the European Union and have them made public. The G20 rules simply obligate national tax authorities to exchange this information. Germany is not alone in preferring the G20 guidelines. So far, eight other E.U. countries have introduced or already implemented new laws to fight tax avoidance, without obliging companies to disclose profits and tax payments publicly.   Read the full story in Friday’s Handelsblatt Global Edition at 12:00 CET. Picture Source: Reuters