European crackdown on tax cheats proposed

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Posted: Monday, November 25, 2013 12:00 am

BRUSSELS (AP) - The European Union's tax man wants to change the rules to make it tougher for companies to escape paying taxes by exploiting countries' differing laws.

European Commissioner Algirdas Semeta unveiled a plan Monday to stop companies avoiding taxes on subsidiaries' dividends in some EU nations because local laws classify the dividends as debt payments.

Semeta also wants to bar companies, including U.S. and other foreign multinationals, from using bookkeeping tricks to shift profits out of higher-tax jurisdictions to shell companies or letterbox affiliates in lower-tax countries.

Semeta's spokeswoman, Emer Traynor, said: "We want to be global leaders in the fight against tax avoidance."

EU finance ministers still must discuss the proposed changes. Implementing them may be difficult. All members of the 28-country European Union would have to be in favor.

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