Germany accuses Italy, France and Spain of allowing TAX EVASION and draining EU funds

GERMANY has accused Italy, France and Spain accusing of allowing huge companies to avoid paying billions in tax and draining EU funds in the process.

Berlin officials have claimed the three EU member states have been deliberately unhelpful in the battle to clampdown on tax-dodging by large companies.

In an astonishing attack, Germany says the trio have kept open loopholes allowing corporations to circumvent tax agreements, leaving the bloc open to losing 50 to 70 billion euros in revenues eat year.

Britain was also holding up attempts to reform the system, according to German officials, who claim the country is blocking the planned publication of an EU-wide blacklist of tax havens.

The report was supposed to have been made public by the end of this year.

MEP Fabio De Masi from The Left Party claimed Britain was trying to protect is oversea territories by holding up reform.

One official told Süddeutsche Zeitung: “The extent of the participation of other member states in the discussions to curb harmful tax competition has reached a new low.”

The allegations were made by Berlin’s Federal Ministry of Finance and surfaced in internal minutes published by Zeit.de.

Officials singled out the use of so-called patent boxes, which allow companies to transfer licence rights to their subsidiaries, thereby reducing tax.

The scathing criticism comes despite the European Commission’s stated aim to crack down on the amount of tax paid by huge corporations.

The bloc’s finance ministers are due to discuss rule changes next week to increase taxes on multinationals including Google and Amazon

In July, the European parliament voted for new tax transparency rules but requiring multinationals to report tax and financial data in every nation where they operate.

However, the regulations included a loophole allowing companies exemptions from revealing “commercially sensitive” information.

Oxfam is among those who have called for reform of the tax system to make sure wealthy companies pay their way.

Aurore Chardonnet, Oxfam’s EU Policy Advisor on tax, said: “It is now down to European member states not to block reforms, otherwise the tax system will remain skewed in the interests of profit and not people.”