Scotland has become the latest country to block companies based in tax havens from accessing coronavirus bailout funds, in a move that will increase pressure on Boris Johnson’s UK government to introduce similar measures.
Members of the Sottish parliament approved new rules on Wednesday night that will mean companies that are registered in tax havens, or are a subsidiary of an offshore company, cannot apply for government grants.
France, Belgium, Denmark, Poland, Wales and Argentina have applied similar policies to their coronavirus business-support packages.
A second amendment to the Scottish legislation, introduced by the Green Party, would have required companies taking bailout money to commit to country-by-country reporting in their accounts. However, the amendment was voted down. Country-by-country reporting has long been a central policy request of the tax justice movement because it would open up to public scrutiny any shifting of corporate profits into tax havens.
Campaigners welcomed the Scottish parliament’s move but warned that it would not prevent large firms that avoid billions in tax from accessing bailout funds.
Scotland, like other European countries that have introduced tax-haven clauses, is relying on the EU’s blacklist of tax havens that does not include some notable tax-avoidance hotspots, such as Jersey, the British Virgin Islands, Switzerland and the Netherlands.
The Tax Justice Network’s chief executive, Alex Cobham, said this would leave the door open to companies registered in many of the world’s most dangerous corporate tax havens.
“Many of the biggest corporate tax havens are based right here in Europe,” he said.