BBC BREXIT LIE EXPOSED: The EU Anti Tax Avoidance Directive will have an impact on British tax-dodging practices
The BBC Brexit narrative is that the EU Tax Avoidance Directive will not have huge implications on wealthy British tax-dodgers is wrong because if we remained in the EU, tax-avoiding offences would be ruled by the European Court of Justice (ECJ), instead of British courts.
BBC BREXIT NARRATIVE ABOUT THE IMPACT OF THE EU ANTI TAX AVOIDANCE DIRECTIVE IN THE UNITED KINGDOM
Since 2016, this blog strived to inform others about the tax avoidance scam perpetrated by Tory Brexiters, but most of the mainstream media kept the EU Anti Tax Avoidance Directive away from the British public, including the British Public Broadcaster, which lacked a comprehensive BBC Brexit narrative on this subject.
However, since prominent individuals such as actor and writer David Schneider, Labour MP David Lammy and TV presenter Terry Christian also tried to inform others regarding the Brexiteers’ aim to prevent the implementation of the EU Anti Tax Avoidance Directive in the UK, the British public broadcaster, finally decided to address this issue, dismissing those claims through a new BBC Brexit narrative.
Rather than obtaining independent interpretations regarding the impact of the EU Anti Tax Avoidance Directive in the UK from various tax experts, the BBC decided to have its own assessment on this matter, claiming that the new measures:
“… are, in fact, all already part of UK law. A small number of them will not come into effect until 1 January, but that would have happened anyway whether or not the UK was a member of the EU… So it’s hard to find anything happening in January 2020 to these rules that looks significant enough to influence the speed at which some people might want to leave the EU.”
However, David Cameron and Nigel Farage happen to disagree with the BBC Brexit discourse that EU Anti Tax Avoidance doesn’t have rules that look significant enough to influence the speed at which some people might want to leave the EU.
Four years ago, Mr Cameron requested from the President of the European Council to exclude offshore trusts from the EU’s new Anti Tax Avoidance Directive:
“David Cameron intervened personally to prevent offshore trusts from being dragged into an EU-wide crackdown on tax avoidance, it has emerged. In a 2013 letter to the then President of the European council, Herman Van Rompuy, the prime minister said that trusts should not automatically be subject to the same transparency requirements as companies.”
Addressing the EU Anti Tax Avoidance Directive at the European Parliament, seven years ago, Mr Farage accused the EU Commission of attempting to “drive a wedge between the United Kingdom and the Channel Islands, the Isle of Man and the Caymans”, adding:
“There’s a great degree of unity here this morning, a common enemy: rich people, successful companies evading tax, which of course is a problem, avoiding tax, which is not illegal, but it gives this whole chamber this morning a high moral tone and, as Mr Barrasso says, it’s all about the perception of fairness.”
If BBC’s claim is correct about the EU Anti Tax Avoidance Directive not having huge implications on British tax-dodging practice, then why:
1. David Cameron requested from the President of the European Council to exclude offshore trusts? or
2. Nigel Farage accused the EU of driving a wedge between the United Kingdom and its tax havens?
Although new EU measures that aim to prevent tax avoidance were partially included in the UK law, their difference lies in the:
1. Territorial jurisdiction; and
2. Institutional jurisdiction.
BBC BREXIT NARRATIVE IS WRONG BECAUSE THE TERRITORIAL JURISDICTION OF THE EU ANTI TAX AVOIDANCE DIRECTIVE IS DIFFERENT FROM THE ONE INCLUDED IN BRITISH LAW
The rules set out in the Article 5 of EU’s Anti Tax Avoidance Directive are similar to the ones set out in the British law, because they will be also imposed on capital gains generated in the territory of the Member State of origin.
The new EU tax rules will be levied on certain cross-border transfers of assets, tax residence or business carried out by the permanent establishment within the EU or in the third-country context, upon transferring:
1. assets from its head office to a foreign permanent establishment;
2. assets from a permanent establishment in a Member State to a foreign head office or permanent establishment;
3. tax residence to another country; or
4. business carried on by its permanent establishment in a Member State to another country—all in so far as the Member State of exit loses the right to tax due to the transfer.
Nonetheless, contrary to the BBC Brexit narrative, you’ll discover there’s a minor detail that distinguishes the UK anti-tax avoidance measure from the new ones endorsed by Brussels, which terrified the British tax-dodging elite and it has to do with the difference between their territorial jurisdictions.
Technically, the British tax havens are still considered part of Great Britain, which is why tax avoidance in the UK is deemed legal, but they aren’t part of the EU!
Therefore, if the UK remained in the EU, the EU’s Controlled Foreign Company (CFC) rules would force EU-operating subsidiary companies of large corporations registered in tax havens to pay their taxes on profits generated in any EU member states.
According to the Independent, Rupert Murdoch’s News International has paid virtually no tax in the past 10 years, despite racking up net profits of nearly £1bn since 1986 and although in 1995 his newspapers, including the Times and the Sun, earned £779m in the year to the end of last June alone, his company paid only £8.3m tax.
Therefore, if were to remain in the EU, under the EU Anti Tax Avoidance Directive, Rupert Murdoch’s the UK registered companies would be forced to pay their due taxes according to profits generated in the UK, irrespective of the financial standings of his corporation registered elsewhere.
BBC BREXIT NARRATIVE IS WRONG BECAUSE THE INSTITUTIONAL JURISDICTION OF EU ANTI TAX AVOIDANCE DIRECTIVE IS DIFFERENT FROM THE ONE INCLUDED IN BRITISH LAW
The other and most important difference between the UK and the EU anti-tax avoidance measures, which BBC Brexit narrative fails to mention, is that the European Court of Justice (ECJ) is responsible for overseeing the implementation of the new EU directive, which is why prominent Brexiteers are desperate to keep it out of the UK!
ECJ will ensure that all EU member states implement its new Anti Tax Avoidance Directive and bring an end to the tax-avoiding practices by the EU citizens or businesses, which poses a real threat to wealthy tax-dodgers whom the British courts failed to prosecute in the past.
According to the BBC, the British government has already transposed the new EU measures, Controlled Foreign Company, Exit Taxation and Anti-Hybrid Rules.
However, according to the British government, the EU measures on Controlled Foreign Company and Exit Taxation rules, are due to come to effect on 1 January 2020, which is why Boris Johnson is so keen to leave the EU as soon as possible.
Outside the EU, tax-avoiding offences would be trialled at British Courts, which in the past have failed to prosecute any of the wealthy tax-dodgers, including the individuals exposed by the Panama Papers in 2016.
Four years have passed since Panama Papers exposed tax-dodging practices by Michael Ashcroft, retired Member of the House of Lords, Tony Baldry, former Member of the House of Commons, David Davies, former Chief Scientific Adviser to the Ministry of Defence, Michael Mates, former Member of the House of Commons and Pamela Sharples, Member of the House of Lords, but British courts failed to prosecute them for their tax offences.
If we were to remain in the EU, under the recommendation of the European Commission, tax-avoiding offences would be trialled at the European Court of Justice (ECJ) a credible institution, renowned for forcing giant corporations to pay their due taxes, hence the strong opposition by prominent Brexiteers.
It appears that prominent Brexiteers disagree with ECJ’s rulings that corporations should pay their due taxes in the same manner that smaller businesses do, which is why they publicly opposed ECJ’s jurisdiction over the UK.
In 2016, ECJ ruled that Apple must reimburse the Irish state a record €13bn to make up for what is considered to be unpaid taxes over a number of years.
In 2019, ECJ ruled that automaker Fiat Chrysler must pay back about $33 million in taxes that it saved by carving out a deal with Luxembourg.
Ultimately, the chair of the BBC Trust, Rona Fairhead has been urged to resign by an influential British MP (but again, not prosecuted by British courts, after the second grilling of HSBC’s bosses over the bank’s alleged role in widespread tax avoidance through its controversial Swiss branch, therefore, it’s hardly surprising why the BBC is keen to silence claims that links Brexit to the EU Anti Tax Avoidance Directive.