Brussels slams seven EU states for 'aggressive' tax policies

BRUSSELS - 7 March 2018: Seven EU countries including the Netherlands and Hungary will on Wednesday face unprecedented criticism from Brussels for "aggressive" tax policies that undercut other member states, the bloc's economic affairs commissioner said.

The European Commission, the EU's powerful executive arm, will hand down the harsh judgment in its regular report on the economies of the union's member states, Pierre Moscovici said on Tuesday.

"For the first time, the Commission is stressing the issue of aggressive tax planning in seven EU countries: Belgium, Cyprus, Hungary, Ireland, Luxembourg, Malta and The Netherlands," he said.

"These practices undermine fairness and the level playing field in our internal market, and they increase the burden on EU taxpayers."

Many of the targeted countries serve as EU headquarters for global multinationals, offering complicated tax schemes that help companies -- such as Google, Apple or Facebook -- to shift profits and avoid big tax bills.

In January former French finance minister Moscovici accused Ireland, the Netherlands, Luxembourg, Malta and Cyprus of being "black holes" and promised to pressure them to change their ways.

The addition of Hungary to the list also threatens to further strain ties between Brussels and Budapest, which are already difficult because of tensions over migration and the rule of law.

Moscovici on Tuesday added: "While we recognise the steps some of these member states have taken to adapt their tax model recently, clearly more needs to be done.

"We must ensure that fair taxation becomes the rule without exceptions."

The criticism of its own member states comes after Brussels published a blacklist of non-EU countries accused of tax avoidance.