Home Eldorado Gold Fool’s Gold #skouries

Fool’s Gold #skouries

0
SHARE

0ByAMXZl2-PZ0bmN1NUpoYkxyOEU

How Canadian mining company Eldorado Gold is devastating the environment and local livelihoods in Greece and avoiding taxes by using Dutch mailbox companies

Profit shifting is when income is shifted from a subsidiary with economic activities in a regular tax jurisdiction to an empty shell subsidiary in a low tax jurisdiction. Costs are thus created or inflated in operational subsidiaries and subtracted from the profit, reducing corporate income taxes.
The report only looked at one tax avoidance opportunity, namely, profit-shifting through loan financing: Eldorado Gold’s Greece subsidiary Hellas Gold SA finances its operations by issuing bonds, which are a form of loan and on which the subsidiary has to pay interest to bond holders. All bonds have been bought up by Dutch subsidiaries, two of which are financed by loans from a Barbados subsidiary. Interest is therefore shifted from Greece to the Netherlands and from there to Barbados.
This Dutch financing structure – rather than direct financing by the Canadian parent company – has saved Eldorado Gold (and cost the Greek government) more than €700,000 in withholding taxes in two years and €1.7 million in corporate income taxes in five years.

Protest and solidarity

Democratic and egalitarian economic alternatives are possible, but systems only change when people organise and hold the powers that be accountable. Then decision-makers will be forced to create conditions under which alternatives can be explored and implemented. An economic justice alternative thus also requires an alternative to the current democratic system, which is closely intertwined with business interests. A necessary counter power requires broad-based movements built on democratic principles and solidarity. An alternative economic model for Europe that serves the public interest should be called for by all European citizens. This requires solidarity for Greece, based on the understanding that there is a material shared interest between ordinary people in all European countries to develop these alternatives. After all, the money lent to Greece under severe austerity conditions has ended up in European banks. Macro-economic imbalances require political-economic solutions, and the first steps in the right direction would be debt auditing, to analyse and criticise where public funds end up, as well as tackling tax dodging. European citizens should advocate for an end to their countries’ support for austerity measures in debt-ridden European economies, and policies that erode other countries’ public finances.

Building knowledge

Alternatives require knowledge, ranging from technical to political expertise. On a daily basis, movements, academics and organisations are building this expertise as an alternative to dominant institutions and political and economic elites. Inspirations for alternatives include trade unions, civil society groups, community groups and political organisations. Tapping into or contributing to existing organisations is one mode of action. ‘Street level’ community organising – in neighbourhood committees and self-organised economic production – can develop into flourishing alternatives to the current economic model.

For more information and examples of concrete actions, see the following organisations and campaigns:

› TroikaWatch

› Greek debt auditing campaign

› Global campaign to end corporate impunity

› Blockupy (Dutch)

› Blockupy (German)

› Ander Europa (Dutch)

For the full report on Eldorado Gold and the underlying research data, see this page:

› Fool’s Gold report

LEAVE A REPLY

Please enter your comment!
Please enter your name here