Large corporations pay almost anywhere in the European Union, the statutory tax rate, but significantly less. This was the result of an investigation by the Green group in the European Parliament. There are massive differences between the officially applicable taxes and actual tax burden of multinational companies.

The strongest deviation was calculated according to Luxembourg. While the nominal tax rate, have located there in the years 2011 to 2015, with 29 per cent, paid by the corporations is actually on average only two percent. In Germany, the tax burden was actually at 30 per cent, to the tax authorities, the company would have paid only 20 percent.

But how can that be?

in fact, it is quite not uncommon for companies to pay less tax, as provided by the law, the normal rate. Because there are a number of rules that make it easier for companies to reduce the so-called basis, i.e. the basis for the calculation of the tax. This is for example the case when companies receive tax incentives for research grants, or investments for the machines to write off.

effective tax rates differ from the nominal tax rates, so wanted, and also, in principle, right: Because, thus, investment incentives for companies, which in turn boosts the economy.

but it is Problematic, if these tax rates rules, thanks to the special too much from the actually proposed tax rate to differ. The example of the so-called patent boxes, which come about in the Netherlands. With the help of this law, a construction company can save billions in taxes. You want to allow a group to transfer patents, licenses, trademark rights or other intangible assets in a subsidiary company, the share then the other group for a fee. The income from these fees is not taxed in the normally very low: In the Netherlands, for example, with five per cent, in Cyprus, with 2.5 percent and in Malta at all.

“such practices can pay for corporate profits from one country to the other locks – significantly less taxes,” says Tobias Hentze, a tax expert from the Institute of German economy (IW) in Cologne.

The result of this is that multi-national corporations, not the tax rate numbers, is required, but a significantly lower. Especially in the Netherlands, Malta and Luxembourg multi-national corporations pay, on average, significantly less taxes to the Treasury, as you would suspect when looking at the statutory tax rate.

Some member States engage in fiscal dumping

“press corporations in many countries to provide their fair share to the financing of the community. This money is needed to invest in public education, health care and social security, which will measurably contribute to reducing social inequality in society. The corporations make profits at the expense of the common good,” said Tobias Hauschild, a tax expert from Oxfam Germany on the results of the study.

suggestions on how you can prevent these practices, there are already longer. The EU Commission has already submitted a proposal to the tax transparency of large corporations. It provides that in all EU countries, uniform tax rules should apply. “So it could be avoided that some member States are dumping their Tax to corporations to attract. If the same rules would apply, likely solutions, such as patent boxes are no longer offered,” says Hentze by the IW. The Problem is that especially smaller member States oppose it because you fear that you may miss tax revenue in the billions.

The financial policy spokesman of the Greens in the European Parliament, Sven Giegold, argues for the so-called Country-by-Country Reporting: After that multi-national companies would be obliged to the authorities of data on turnover, profit and tax payments country by country. What would enable the tax offices, corporate tax there, where the income is earned. “The EU Commission has submitted a good proposal to the tax transparency of large corporations,” said Giegold, the “süddeutsche Zeitung”. “As Finance Minister, Olaf Scholz, has to abandon its Blockade and the Council for country-by-country tax transparency.”


Sam Yoon has many years of experiences in journalism. He has covered such areas as information technology, science, sports and politics. Yoon can be reached at 82-2-6956-6698.