At a hearing before the European Parliament's Panama Papers committee of inquiry on Tuesday 26 September, the German company BASF provided a candid defence of its taxation practices, slammed a few months ago in a report by the Greens/EFA (see EUROPE 11662).
“Taxes are costs and businesses have to keep their costs down”, the BASF representative said frankly. “When decisions have to be made regarding investments, the tax burden is a factor”, he said, adding that a few years ago, the company had invested €1 billion in an industrial complex in Singapore, with a partner. “When you make that kind of investment over there, you are exempted from tax for ten years. What's so wrong about that? It isn't discrimination, the rule is the same for everybody”. He went on to say that the figures in the Greens/EFA report were correct, but that they had been wrongly interpreted.
The dividends of the Netherlands-based group come largely from the United States, where they are taxed at a rate of 38%. If they were re-taxed in the Netherlands, that would be double taxation, the representative explained. BASF furthermore considers that the proposed common consolidated corporate tax base, particularly its profit distribution key, “fails to take account of material assets, of which there are many in Germany”.
Earlier that day, the MEPs met representatives of FIFA and UEFA, after Football Leaks showed that certain figures in the world of sport were using tax advisers to hide their assets from the authorities. Both associations declined any responsibility, stressing that they were involved in the game, but not in tax law.
“I would like to thank you for coming, but not for your responses. This is a magnificent example of waffle”, said Belgian MEP Louis Michel (ALDE). The start of the session, moreover, provided the chair, Werner Langen (EPP, Germany), with the opportunity to point out that the company Caterpillar had outright declined to come and answer the committee's questions. (Original version in French by Élodie Lamer)