PortandTerminal.com, April 20, 2020
“Companies that seek to dodge their obligations to broader society by cutting their tax bills shouldn’t expect to get bailed out when things go wrong,”
LONDON – Two European countries, Denmark and Poland, are saying “No bailout money” for companies that are registered offshore.
The Danish government took it one step further and announced this weekend that companies which pay out dividends, buy back own shares or are registered in offshore tax jurisdictions won’t be eligible for any of the state aid programmes.
In Poland, Prime Minister Mateusz Morawiecki said large companies wanting a chunk of a roughly $6 billion bailout fund must pay domestic business taxes. “Let’s end tax havens, which are the bane of modern economies,” he added.
The moves have been met with sympathy on social media, with many people suggesting other countries such as the UK should follow suit.
An article published by the London Economic today already has 88.1k upvotes on the popular website Reddit’s news feed.
It is unclear whether other European nations will follow the example of Denmark and Poland, but it is unlikely that authorities in the UK, the Netherlands, Switzerland, and Luxembourg will do so. All four have provisions making them attractive to businesses that also allow them to be registered offshore. Not everyone agrees though.
“Companies that seek to dodge their obligations to broader society by cutting their tax bills shouldn’t expect to get bailed out when things go wrong,” Robert Palmer, the executive director at Tax Justice UK, told Business Insider in an interview.
In America, companies who accept Federal loans will be banned from buying back shares for up to a year until they have paid back the taxpayer.
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