Verbatim report of proceedings

Wednesday, 13 February 2019 - Strasbourg

Fair taxation for a just society (topical debate)

  Jeppe Kofod, author. – Mr President, tax evasion in the EU costs Member States EUR 825 billion every single year. This is theft from hard-working people, pure and simple. From 1997 to 2017 the average company tax rate in Europe fell from over 35% to under 22%.

Digital companies pay even less in taxes – only 9.5% on average according to the Commission’s figures. Internet giants – like Apple, Google and Facebook – pay practically zero tax on their European businesses. Apple famously paid only 0.005% in taxes, while Google and Facebook paid 0.82% and 0.03%. This is not only making a mockery of ordinary citizens and regular companies in Europe who are paying their fair taxes to contribute to society, but it is an existential threat to well-functioning welfare states, societal fairness and a sustainable transition in Europe.

We Socialists and Democrats want to stop international tax evasion and avoidance that also accelerates inequalities in the world today. We know that 26 people owe as much as EUR 3.8 billion – half of the world’s population – according to new figures. We want tax justice and we want it now. We have put forward concrete solutions to achieve that and the EU needs to take the lead. We want a fair and urgent taxation of the internet giants who profit from European customers but pay almost no tax in Europe. We want an effective minimum corporate taxation in Europe to stop the harmful race to the bottom on corporate taxation. We also want a financial transaction tax to stop harmful speculation and to ensure much—needed taxes to fund public services. It is time for tax havens – even the European Council – to stop defending the broken tax system of yesterday. It’s time to stand up for fair taxation and demand that all companies, especially the largest and richest of them – the digital giants – contribute to society.

We Social Democrats of course support the OECD solution to the problem of taxing digital companies, but we will not wait forever and we will not sit idle and silent while the richest and biggest companies in the world continue to pay less than 1% tax in Europe. We reject the false argument that EU Member States should not take the lead in stopping the non—taxation of digital giants. How on earth can opponents of the EU solution claim that 36 members of OECD and 128 members of the Inclusive Framework will reach a decision faster than the 28 Member States in the EU when they themselves are blocking progress in the European Council?

The clock is ticking. We know that. France, Italy, Spain, the UK and Austria all have plans for national taxation of digital giants, as they should. Blocking an effective EU solution to the problem of the non-taxation of digital giants will not prevent uncoordinated action on this. It will actually ensure uncoordinated action. We have a workable EU solution to fairly tax digital giants on the table. We have stated clearly that if and when an OECD solution is adopted, this solution would immediately take its place.

But, honestly, do you really think for a second that Donald Trump will fight for fair taxation of companies? Because he needs to support the OECD solution too. Do you trust a deal with the man who pulled out of the Paris Agreement and a G7 statement via tweets? This is a choice that the politicians of Europe must make now. Do we want to act and force internet giants to pay their fair tax in Europe or do we just want to wait and hope someone else will find a solution, while the countries of Europe are losing billions in taxes? We Socialists and Democrats have a clear message to the governments imposing fair taxation. Stop defending your richest companies who pay little tax. Start defending European citizens and welfare states. This is your job. Now it’s time to do it.