Corporations are regularly using secretive corporate courts to undermine the ability of countries to pass effective tax legislation, according to a new report, Taxes on trial: How trade deals threaten tax justice. The report warns that if the free trade deal being proposed between the EU and the USA were to come into force, it would massively increase the ability of corporations to sue member states of the EU over measures such as windfall taxes on exceptional profits, or use of taxation as a policy instrument such as a possible ‘sugar tax’.
The report, published by Global Justice Now and the Transnational Institute, shows that corporations have used the ‘investor protection’ provisions of a variety of different trade deals to sue at least 24 countries from India to Romania over 40 tax-related disputes, and in some cases been able to successfully challenge and lower their tax bills. This investor protection is controversially an integral part of current free trade deals being negotiated between the EU and the USA (TTIP) and the EU and Canada (CETA) and is known as Investor State Dispute Settlement (ISDS).
Download the full report Taxes on trial: How trade deals threaten tax justice here.