The European Union loses 37.6 billion in tax revenues due to profit shifting - Main contents

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  The European budget in a different perspective -

“Belgium, Ireland, Luxemburg and the Netherlands impose significant costs on other member states through profit shifting. These costs dwarf by far the net contributions to the EU budget by these four member states. Taking into account the benefits from European institution and agencies, three of them are already a net cost to the European Union. The Netherland is however a net contributor to the EU budget, but imposes in fact net costs on the Union as a whole: 11.2 billion euro. So it’s time we look at the EU-budget from an other perspective,” says MEP Paul Tang (S&D), since the negotiations on the European budget are starting today.

The EU budget negotiations have been dominated by the logic of ́’juste retour ́ which entails that member state ́s contributions and receipts should be in a fair balance. This logic is clearly at odds with the principle of solidarity among member states, especially since the report finds that some Member States are no net contributors if the agressive tax planning practices are taken into account.

Paul Tang made a report that brings together insights and estimates from other public sources to arrive at a fresh perspective on the redistribution of money within the European Union. The research uses data from the economist Gabriel Zucman, who previously conducted research into the tax bases in Europe.

The starting point is the budget of the European Union, but attention is also paid to the agencies, including EMA and to the shift of the tax bases.

KEY CONCLUSIONS:

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  Tax avoidance via 6 Member States results in a loss of 42.8 billion in tax revenue in the other 22.
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  The EU as a whole loses 37.6 billion; which disappears in the pockets of shareholders, including Bezos and Zuckerberg.
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  Belgium and Luxembourg benefit greatly from the European institutions.
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  Due to profit shifting, the costs for Germany, France, the United Kingdom and Spain doubles.
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  The EU misses out 11.2 billion due to the Netherlands. So the net payment position of the Netherlands can be offset against the losses it inflicts on the tax base of other Member States

You can find the whole report here.