A number of large multinationals mostly American have moved their European headquarters and finance operations out of traditional European Union locales to Switzerland and Ireland, aiming to avoid costs associated with so-called tax harmonisation. That’s the EU’s term for its effort to end competitive tax breaks among member states, a practice Brussels regards as harmful.
The corporate moves, by such big names as John Deere, Ralph Lauren and General Mills, are fuelling concern among business boosters and revenue officials in some EU countries, particularly the Netherlands and Belgium, which are losing their lustre as tax havens.
The shift is partly attributable to the EU’s tax-harmonisation drive, lawyers and development officials say. The European Commission, the EU’s executive branch, has tried to do away with “harmful tax competition” between member countries by clamping down on uncompetitive practices such as state aid and various shelters that have long figured in tax planning by multinationals.
Source: Glenn R. Simpson and Dan Bilefsky, EU’s Tax Changes Scatter Corporations: Switzerland, Ireland Draw Companies Seeking to Avoid a Rise in Obligations, Wall Street Journal, October 9, 2003.
For text (WSJ subscription required)
http://online.wsj.com/article/0,,SB106564495251459400,00.html
For more on International (Taxes and Growth) http://www.ncpa.org/iss/int/
FMF Policy Bulletin/ 14 October 2003
