Welcome

Tax-Haven Companies Shouldn’t Get Covid-19 Bailouts, EU Says

July 14, 2020, 11:08 AM

Companies linked to tax havens such as Panama and the Cayman Islands shouldn’t get subsidies from cash-strapped governments amid the Covid-19 pandemic, according to European Union antitrust chief Margrethe Vestager.

“We are in an unprecedented situation where exceptional volumes of state aid are granted” to companies during the outbreak, Vestager said in a statement on Tuesday. “It is not acceptable that companies benefiting from public support engage in tax avoidance practices involving tax havens.”

EU governments are being asked to bar state aid to companies with units based in the bloc’s list of non-cooperative tax jurisdictions. The EU also wants a ban on aid for businesses convicted of serious financial crimes, such as fraud, corruption and non-payment of tax or social security obligations.

A growing number of European countries are already moving to exclude aid to companies based in tax havens. EU states have pledged close to 3 trillion euros ($3.4 trillion) to help firms overcome the pandemic which shut down travel and halted much business activity earlier this year.

Vestager has spearheaded a fight against tax dodging by demanding back-tax from companies that the EU sees as getting an unfair deal from some governments. Apple Inc. will on July 15 hear an EU court rule on its challenge to a 13 billion-euro back-tax bill ordered by the EU.

--With assistance from Stephanie Bodoni.

To contact the reporter on this story:
Aoife White in Brussels at awhite62@bloomberg.net

To contact the editors responsible for this story:
Anthony Aarons at aaarons@bloomberg.net

Peter Chapman, Christopher Elser

© 2020 Bloomberg L.P. All rights reserved. Used with permission.

To read more articles log in. To learn more about a subscription click here.