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In some EU countries, a letterbox is sufficient for the company headquarters (symbol image)
Photo: felker / imago images
Luxembourg is actually tiny.
Its population corresponds to that of Düsseldorf, its area that of the Saarland.
As a location for multinational corporations, however, the Grand Duchy is a giant.
According to calculations by Berkeley economist Gabriel Zucman and two of his colleagues, around 66 billion US dollars in profits were moved to Luxembourg in 2017 alone.
An opaque system of mailbox companies and very gracious taxation averaging three percent awaited them there.
Germany, on the other hand, where the tax rate was a good 20 percent, according to the calculations escaped a roughly equal amount - which corresponds to a good quarter of corporate tax revenues.
Until recently, such calculations were not possible due to the lack of relevant data.
All the more important is a decision made on Thursday by the European economics ministers: Using what is known as Country-by-Country Reporting (CbCR), large corporations will in future break down profits and tax payments by EU country.
European solidarity looks different
The decision is a sign of European self-respect.
If the international community wants to be taken seriously in tax policy, its members should no longer allow themselves to be played off against each other by corporations.
According to Zucman, the biggest losers in this game worldwide are those EU countries that, unlike Luxembourg or Ireland, are not tax havens.
The biggest profiteers, however, seem to be multinational corporations headquartered in the USA.
They include the technology group Apple, whose tax rate in Ireland was at times 0.005 percent according to the EU Commission.
To this day, the Irish government has refused to collect 13 billion euros in taxes from Apple on instructions from Brussels.
European solidarity looks different.
If the EU Parliament approves the CbCR as expected, tax tricks will not yet be prevented.
But it will be easier for journalists, non-governmental organizations and interested citizens to understand how corporations distribute their profits and thus minimize taxes.
This can create public pressure that leads to change.
It was like that after scandals like the Panama Papers or the so-called Lux Leaks.
It was rarely about financial constructions that were clearly illegal.
Tax evaders often move in gray areas or use models that states officially offer them.
That is why the objection of CbCR opponents that the tax authorities already have all the data is not convincing.
Wirecard as a warning
Because not everything that a tax official has to approve is unproblematic.
In addition, authorities do not necessarily recognize even crooked deals if they are cleverly distributed across the globe.
This is particularly evident in the scandal surrounding the insolvent payment service provider Wirecard, who disguised dubious payment flows with the help of trustees and thus damaged many small shareholders.
CbCR is now also improving the »wealth of information for investors«, says MEP Sven Giegold (Greens), who has long been fighting for disclosure.
Other objections to the CbCR also don't really catch on on closer inspection.
One of them reads: the publication of the data meant an intrusion into tax secrecy and could benefit non-European competitors.
There is no question that tax secrecy is a valuable asset.
However, the disclosure obligation does not affect private individuals or SMEs.
It should only apply to groups with an annual turnover of at least 750 million euros, which are usually already subject to extensive publication requirements.
And they are also subject to exception rules in the event that business secrets could otherwise be disclosed.
In Germany, warnings from the economy were nevertheless successful for a long time.
Former Federal Finance Minister Wolfgang Schäuble (CDU) slowed down, in some cases, single-handedly when the commission presented a first CbCR draft in 2016.
In the current vote, Federal Minister of Economics Peter Altmaier (CDU) abstained - what SPD boss Norbert Walter-Borjans described to SPIEGEL as a "scandalous" success of lobbyists.
Federal Finance Minister Olaf Scholz (SPD) supports the publication, but only positioned himself at a time when he was fighting with Walter-Borjans and others for party leadership.
It won't be the last struggle.
For years, Europeans have also been discussing a common tax base for corporate tax.
Because so far they have not even agreed on the basis on which companies' taxes are calculated.
Different rules continue to prevail in tax competition.
With the help of the new publication requirements, this should at least become clearer.
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