EU Parliament to Push for Public Tax Rulings in Wake of Apple

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By Joe Kirwin

Sept. 6 — Various European Parliament political groups will push for mandatory publication of EU member nation tax rulings in the wake of the decision calling for Apple to pay $14.5 billion in back taxes to Ireland.

“After the Apple ruling it is obvious that publication of tax rulings is necessary,” Catherine Olier, a tax adviser to the European Green Party, told Bloomberg BNA. “The Apple tax evasion went on for more than 10 years because the tax rulings it had with the Irish government were secret.”

Jeppe Kofod, a Danish member of the European Parliament who speaks on behalf of the Socialists and Democrats in the Committee for Economic and Monetary Affairs, told Bloomberg BNA the issue of making tax rulings public is a matter of timing.

“The recent spate of illegal state aid rulings clearly shows that tax rulings must be open to scrutiny from both EU and member state authorities,” Kofod said in an e-mail statement. “I recognize that some tax rulings may be legitimately business-sensitive and, as such, not immediately suitable for publication to the wider public, but that I believe is merely a question of timing.”

The European Parliament in 2015 overwhelmingly approved amendments to the EU Shareholder's Rights Directive that called not only for mandatory publication of tax rulings but also for making public companies country-by-country profit and tax reports. That legislation is blocked in negotiations with EU member states, which insist that both issues are tax legislation and should only be decided by unanimous consent in the Council of Ministers and without co-decision from the European Parliament .

Luxleaks, Trade Secrets

European Parliament members' urgency to make tax rulings public is further propelled by Luxembourg's recent prosecution of whistle-blower Antoine Deltour, a former employee of PricewaterhouseCoopers LLP, for stealing confidential tax files that revealed hundreds of Luxembourg's low-tax rulings with multinational companies.

The judgment against Deltour referred to the recently approved EU Trade Secrets Directive as justification for protecting the confidentiality of tax rulings .

Following the Deltour judgment, the European Commission acknowledged that the trade secrets legislation, proposed primarily to protect proprietary company information against industry espionage, could shield the kind of information required for the public release of a tax ruling.

“Tax-related information that is kept confidential in accordance with the law does not necessarily qualify as a trade secret within the meaning of the directive,” the European Commission said in a July response to a question put to it by Pascal Arimont, a member of the European Parliament from Belgium.

“Such information could be considered a trade secret if the requirements of that directive are met, including in particular the requirement on the commercial value of the information,” the commission said. “Whether a concrete piece of information meets those requirements must be assessed by the relevant judge on the basis of its concrete content.”

MEPs Reject Trade Secrets Law in Luxleaks

Following the controversial prosecution of Deltour and the reference to the EU trade secrets legislation in the case, various European Parliament members who worked closely on the legislation and who also sponsored amendments calling for mandatory publication of tax rulings issued a statement insisting the Trade Secrets Directive was improperly referenced in case.

“Members of the European Parliament involved in the drafting of the Trade Secrets Directive, which was recently adopted by the EU institutions, have expressed their grave concern over the misinterpretation of the directive in the Luxleaks ruling on June 29, 2016,” according to their statement.

“The MEPs involved in the drafting of the directive specifically agreed the wording of the exception to protect whistle-blowers in a way that would include, in particular, cases like Antoine Deltour's by mentioning explicitly that the revelation of any ‘wrongdoing’ or ‘misconduct’ besides any illegal activity should be covered in the exception.’

“For these reasons we consider that, in this case, the intention of the legislators has been misinterpreted in the ruling,” said the parliamentarians' letter.

Legal Obstacles

Should European Parliament members succeed in approving amendments to the pending EU public country-by-country reporting proposal, they will face important legal issues according to Werner Haslehner, a professor of international tax law at the University of Luxembourg.

“Just as the gathering of information by tax authorities in the normal tax assessment procedure, the question of factual information as part of the request for a determination of their legal consequences by the tax administration in the form of a so-called ruling is predicated on the treatment of that information as confidential,” Haslehner told Bloomberg BNA in an e-mail.

He said the OECD “clearly recognized this need” in the Convention on Mutual Administrative Assistance in Tax Matters that regulates tax information exchange between tax authorities.

Haslehner added that while “one can have a political debate on the extent of any confidentiality, it appears particularly problematic to expose any information that was provided to authorities under a legal guarantee of confidentiality at the time.”

No-Name Publication

Roman Pichot, a Paris-based tax lawyer, told Bloomberg BNA that keeping tax rulings confidential gives the lawyers of companies that negotiate them an “unacceptable competitive advantage” because “they know what tax authorities are willing to grant.”

However he also recognized that some information in a ruling could be confidential and therefore “the solution is publishing the details on a no-name basis and the others should just be summarized and made anonymous before being disclosed.

“This is the only way to meet the goals of protecting companies and allowing fair competition,” Pichot said. “This would also prevent certain countries from engaging in unfair tax competition.”

To contact the reporter on this story: Joe Kirwin in Brussels at

To contact the editor on this story: Rita McWilliams at

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