S&D Euro MPs today welcomed with satisfaction the new common rules on corporate taxation proposed by the European Commission and urged the member states to show greater ambition.

S&D Group president Gianni Pittella said:

"The Socialists and Democrats have long called for effective rules to address the corporate behaviour of shifting profits from one country to another.

"With the LuxLeaks and Panama Papers revelations, this has become an urgent matter. We want to ensure that profits are taxed where they are generated. This is the way forward to avoid aggressive tax planning by big multinationals.

"We understand that the Commission had to choose a two-step approach in order to unblock this file in the Council. But we will fight to ensure that the common tax rules are followed by consolidation. This means that companies will have to file one single tax declaration for their activities across the EU. We are aware that the discussion between member states will be difficult, but we urge them to support the proposals and not to water them down.

"Companies cannot have it both ways. They can no longer use the level playing field of a single market while tax shopping.

"In the long run, the EU will have to tackle the issue of corporate tax rate convergence. This is the only way to avoid a race to the bottom between member states on taxation."

S&D Group spokesperson on economic and monetary affairs Pervenche Berès added:

”The Commission has proposed a super deduction for research and development (R&D) investments. We are big supporters of innovation but it is crucial to have a good definition of R&D to ensure that this exemption is not used to artificially shift profits and reduce the tax base.

"Moreover, we will fight to extend the scope of the proposal which is only mandatory for corporations with a turnover above €750 million.  In our view, the rules should apply to all companies with cross-border activities and a turnover above €40 million – which would cover around 20,000 companies across the European Union.

“Small and medium-sized enterprises (SMEs) will have the option to choose the system they prefer. The overall objectives are to close tax loopholes and to make the new system more effective and less costly for business taking place within the Single Market. In the end, we want everyone to pay their fair share of taxes."