EU Referendum

Reality Check: Has the EU led the way on tax avoidance?

Tom Watson saying: The EU has led the way on tax avoidance by coordinating the international drive to crack down on individuals and institutions who hide their money offshore.

In a speech on Friday, Labour deputy leader Tom Watson said: "The EU has led the way on tax avoidance by co-ordinating the international drive to crack down on individuals and institutions who hide their money offshore."

That's not entirely true - tax powers are one of the things that remain devolved to member governments.

The European Union has led the way on measures to prevent money laundering, but taxes are set on a country-by-country basis. Some member states have used this power to set themselves up as low-tax jurisdictions within the EU - Ireland, for example - encouraging multinational corporations to shift their profits there to pay lower taxes.

It has had some success going after tax deals made by member states with individual companies under state aid rules. It did this, for example, with Luxembourg and the Netherlands on Fiat and Starbucks respectively.

It may be argued that if anyone has been taking the lead on tax avoidance it is the OECD (the Organisation for Economic Co-operation and Development, a 34-country group that has also been working to tackle offshore avoidance and evasion).

It is true that cross-border co-operation is needed to deal with tax avoidance, and it has made some important changes, such as the update to the European Savings Directive in 2014, which closed some loopholes that were allowing taxes to be avoided.

It may be that unwillingness from member states has been a factor in preventing the EU doing more about tax avoidance. It emerged earlier in the week that David Cameron had written to former European Council President Herman van Rompuy in 2013 asking for offshore trusts to be excluded from a crackdown on tax avoidance.

Reality Check verdict: The EU has done some useful work on tax avoidance but cannot really be described as having led the way.


READ MORE: The facts behind claims in the EU debate


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