Fears have been raised that a controversial new trade deal being negotiated between the European Union (EU) and the United States could make it more difficult to tackle tax avoidance in future.
A new report has flagged up concerns about the possible implications of the Transatlantic Trade and Investment Partnership (TTIP) –a secretive agreement which is likely to be finalised towards the end of the decade.
The deal is widely expected to include provisions which would allow large corporations to “sue” national governments for any action which may prove detrimental to their business.
The Transnational Institute and Global Justice Now, who prepared the recent analysis, fear that this could hand multi-nationals new opportunities to challenge tax policies imposed by sovereign nations.
Nick Dearden, the director of Global Justice Now, said: “Despite the enormous public outcry over companies like Google and Amazon paying ridiculously small amounts of tax in the UK, the Government is trying to sign us up to a trade deal that could effectively prevent us from bringing about laws that could address tax injustice.
“The ability to enact effective and fair tax systems to finance vital public services is one of the defining features of sovereignty. The fact that multinational companies would be able to challenge and undermine that under TTIP is testament to the terrifying extent of the corporate grab embedded in this toxic trade deal.”
Cecilia Olivet, from the Transnational Institute, added: “The evidence of the dangers of these investment deals continues to mount. Not only do they affect health and the environment and cost taxpayers millions in legal fees, this report shows they also affect the ability of governments to tax corporations effectively.”
The next round of TTIP negotiations is set to get underway in Brussels next week.