A year after the LuxLeaks scandal, the European Parliament has approved a landmark report designed to be a game-changer in ending the current inacceptable tax dodging by multinationals and to ensure a fairer tax system in Europe.
With the approval of this report, the Socialists & Democrats in the EP want to continue the work in this field in the framework of a TAXE II with an enlarged mandate to complete the work started by the first TAXE special committee and monitor the implementation of its long list of recommendations.
S&D Group spokesperson for the special TAXE committee, Peter Simon said:
"Our work has shown me that we are not dealing with isolated incidents here, but with systematic tax dumping that is organized, or at least tolerated by the state. This vicious circle has to be broken by increased transparency, control and sanctions. We speak for all honest taxpayers when we make it clear that such behaviour can no longer be tolerated.
"The negative effects of tax avoidance by multinational companies have to be borne by all other taxpayers, including small and medium enterprises. Therefore a comprehensive legal framework for fair corporate taxation in Europe has to be established.
"In the report of the special committee we make suggestions to and make clear what we expect from member states and the European Commission – namely a comprehensive package against aggressive tax planning. It must be our goal to make companies pay taxes in those countries where profits are generated."
S&D Euro MP and co-author of the TAXE committee report, Elisa Ferreira, said:
"For many years, big multinationals were able to cut their tax bill through sweetheart deals negotiated in different member states. As a result the taxes that support our health services, education, and infrastructure were paid almost exclusively by SMEs and the average citizens. This situation has become politically unbearable particularly in times of harsh budget cuts in social welfare expenditure.
"Today this Parliament has given the EU governments and the European Commission a clear roadmap to fight aggressive tax planning by multinationals and change the current inacceptable situation.
"The report contains many progressive proposals. They include (among many other measures): a call for EU governments to adopt new rules to force multinational companies to report their profits and taxes paid on a country-by-country basis; a full common consolidated tax base for corporate taxation (CCCTB); a European blacklist of tax havens, with sanctions for those dealing with them; protection for whistleblowers; and an incompatibility regime for advisors on tax matters. They also urge member states to increase transparency on the tax rulings negotiated between national tax administrations and multinationals, which were at the heart of the LuxLeaks scandal, and to provide sanctions in the event of non-compliance.
"The work is not over. We could not access some information. By setting up a new committee, we hope to complete our work and keep up the pressure so that these recommendations are translated into concrete actions."