|Fabio De Masi is
a new entry this year
Fabio De Masi is a new entrant in the Global Tax 50. He is a
member of Germany's Die Linke party, part of the European
United Left-Nordic Green Left in the European Parliament. De
Masi served in the European Parliament between 2014 and 2017
before being elected to the Bundestag in September for his
As part of the German Die Linke party, De Masi is member of
the only party in Germany that has a firm political platform
opposing tax loopholes in Germany, and which still insists on
the reinstatement of a wealth tax. He has not been afraid to
speak out against tax havens or 'Steueroase made in
In an opinion piece for German daily newspaper Frankfurter
Rundschau in August 2017, De Masi wrote: "Palermo's anti-mafia
prosecutor, Roberto Scarpinato, says if he was a mafiosi he
would invest in Germany", and pointed out that Germany ranked
ahead of Panama among the Top 10 countries in German NGO
Steuergerechtigkeit Netzwerk's 'shadow finance index'.
De Masi does not mince his words when he speaks about tax
dumping and money laundering and has made the fight against
offshore tax evasion part of his political platform. He is also
known for his involvement in pressuring Jean-Claude Juncker to
reveal the missing pages of the Krecké Report in 2015
and for his undercover investigations of Panamanian law firm
He calls for "brutal transparency for shell companies and
corporate profits, effective minimum tax rates for businesses
and potent penalties for tax evaders".
De Masi unabashedly voices his demands for tax transparency
and the legal reforms needed to implement fair taxation in the
Before his move from Brussels to Berlin, he also served as
vice-chair for the European Parliament's Committee of Inquiry
into Money Laundering, Tax Avoidance and Tax Evasion (PANA) on
money laundering, tax avoidance and tax evasion.
International Tax Review spoke to him about his work
as the vice-chair of the PANA committee and his continued
political work on the promotion of tax justice.
International Tax Review: How would you evaluate the
success of the PANA committee? What type of governance changes
do you think it was able to introduce?
Fabio De Masi: The European Parliament
cannot directly legislate corporate taxation and is only a
co-legislator for anti-money laundering measures. The PANA
committee (see page 51) can tell a story and issue
recommendations. The council and the EU Commission are blocking
rights of inquiry committees such as to summon witnesses under
oath or access to relevant documents. However, if the PANA
report reaffirms the demands of the European Parliament for the
current revision of the anti-money laundering directive such as
closing loopholes for nominee directors, making grave tax
crimes a predicate offense and calling for tougher sanctions,
we can maintain public pressure. I am particularly proud that
by my initiative to invite Elise Bean – a previous
Global Tax 50 nominee and former chief of staff of the
permanent committee of investigations of the US Senate
– there is a stronger commitment in the European
Parliament to form a permanent committee on taxation. I hope
Parliament will gain a majority for that among the leaders of
political groups as further tax leaks are to be expected.
ITR: It is easy to show outrage over money laundering
scandals and offshore tax havens but it takes more courage and
good arguments to call out tax loopholes in developed
economies. Will you continue to address these issues in the
FDM: I expect to continue my work in the
financial affairs committee of the Bundestag. Larger economies
such as Germany or the Netherlands may even do more harm than
notorious Caribbean islands or small member states such as
Luxembourg. According to the German Federal Police (BKA) our
weak anti-money laundering laws, especially in the real estate
sector (e.g. share deals), make Germany a prime destination for
dirty money including money that is used for terror finance.
Other areas of concern are the lax treatment of undeclared
interest income from foreigners, a weak sanction regime and the
absence of a corporate criminal law for banks assisting in tax
evasion or money laundering and the resistance of the German
government to support public registers of true beneficial
owners and public country-by-country reporting (CbCR).
ITR: What are some of the milestones you are looking to
achieve during your term?
FDM: It is unlikely that 28 EU member
states will agree in tax matters. Hence, we will only see
relevant progress in of corporate taxation if larger member
states such as Germany and France threaten to penalise
financial flows to low-tax jurisdictions by source taxation.
This may become especially relevant with Brexit and UK attempts
to further slash corporate tax rates.
The EU lacks a competence for corporate taxation and all tax
issues are dealt with within the narrow remit of competition
law and the state aid regime.
The system of transfer pricing is overly complex and
outdated as intangibles such as patents can hardly be priced.
Even the EU Anti-Tax Avoidance Directive leaves too many
loopholes. Hence, we will only see relevant progress if we
treat multinational corporations as single entities and account
for their profits at EU level. Then it wouldn't matter anymore
if they shift profits across borders into letterbox companies.
However, the current common corporate tax base (CCTB) proposals
may even further reduce the tax base as they provide for
cross-border loss recognition prior to consolidation of
profits. Hence, a source taxation seems a reasonable
ITR: Could you name a few successful outcomes of your
campaigns for tax justice and tax transparency?
FDM: I think we achieved a broad consensus
among many national parliaments for greater tax transparency
such as public CbCR as already introduced for the banking and
extractive industries. That is a prerequisite to detect
patterns of tax avoidance and hence bad laws. Although the EU
Commission wants to limit CbCR to commercial activities of
companies in EU member states and the European Parliament
introduced a very generous loophole for commercially sensitive
information, we will continue to push for more ambitious
reforms. Therefore, I am part of the Global Tax Transparency
Network of parliamentarians from all over the world.