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 Full text 
Tuesday, 15 December 2015 - Strasbourg Revised edition

Bringing transparency, coordination and convergence to corporate tax policies (debate)

  Anneliese Dodds, rapporteur. Mr President, aggressive tax avoidance and evasion cost the European Union EUR 1 trillion a year. That is a huge loss for Member States, but it is an even bigger loss for the people who live in the Member States. Their public services have, in many cases, been cut to the bone while the taxes they pay have been hiked. It is also hugely unfair for those small and medium—sized businesses that pay their fair share of tax. How can they compete against giant multinationals which can get their tax bills down to almost nothing?

There is a wider impact too – less tangible, but no less important. Scandals like LuxLeaks have severely undermined the public’s trust, not just in the Luxembourg Government but in tax administrations and governments across Europe. I find it impossible to explain to my constituents why giant companies like Facebook can get away with paying less in corporate tax, in a country like the UK, than the average citizen does per year in income tax.

The time for hand—wringing is well and truly over. Now we need to take the hard decisions necessary to sort out the corporate tax system. Both the Commission and Member States will have to take action which, in the short term, will almost certainly be challenged by vested interests but, by stopping the vicious cycle of beggar—thy—neighbour policies, they can make their economies more efficient and help rebuild public trust in both tax authorities and governments.

As with the Ferreira—Theurer report, this report shows that there is a strong consensus in the House for real hard—hitting action to be taken against tax dodging. That consensus is quite remarkable. It extends across every single political group in this Parliament. Individual MEPs from across this House have submitted amendments that have strengthened the text as, of course, have the shadow rapporteurs whose contribution has been essential.

Above all, I want warmly to thank my co—rapporteur, Luděk Niedermayer, for all his incredible hard work and that of his team. Despite the inevitable differences between us, we have managed to create a text that is simultaneously comprehensive, practical and radical. As rapporteurs, we were given the brief of improving transparency, coordination and convergence in corporate tax. To achieve this, we drew on the work of the special committee and our own consultations with a variety of stakeholders, experts and academics.

Four key measures stand out from our recommendations on transparency. First, all companies that operate across borders should report where they make their profits and where they pay their taxes. A ‘fair taxpayer’ label should be awarded to companies which engage in good tax practice. EU countries should tell each other when they introduce a new, potentially harmful, tax measure, and there must be much better protection for whistleblowers who report tax dodging.

When it comes to coordination, businesses underlined to us time and time again the need for the EU to implement a full Common Consolidated Corporate Tax Base (CCCTB). This would not set common tax rates, but would clean up the process of defining taxable assets and activities and greatly simplify tax administration.

Finally, when it comes to convergence we need clearer guidelines on tax—related state aid and a common, objective definition of tax havens. We then need to apply the definition to prevent those companies that use tax havens benefiting from EU funds. The constituency of the UK Prime Minister, for example, that of Witney in his hometown, includes 25 properties registered to tax havens and huge swathes of countryside owned in tax havens, which benefit from Common Agricultural Policy funds. We have to end this farce.

To conclude, I hope that, throughout the debate to come and the vote that will follow it, we will see a continuation of our consensus so far, as a parliament, to take timely, targeted and practical measures to end tax dodging.

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