It has taken eight months of hard work, but the results are finally there: on Monday 26 October the special committee on tax rulings adopted its recommendations for achieving fair and transparent corporate taxation in Europe. MEPs vote on them during November's plenary session, although before that multinationals will still have a chance to share their views on the matter with the committee. Read on for more information and an overview of taxation levels in member states.
The special committee on tax rulings voted on its recommendations on Monday 26 October. A press conference on it took place the following day featuring the two MEPs responsible for drafting the recommendations, Portuguese S&D member Elisa Ferreira and German ALDE member Michael Theurer, as well as committee chair Alain Lamassoure, a French member of the EPP group.
German EPP member Markus Ferber, who wrote a report on the automatic exchange of tax rulings between member states, also took part in the press conference. He called member state' current approach on the exchange of tax rulings "a disappointment" as it does not meet expectations. MEPs adopted his report during the plenary session on Tuesday 27 October.
Multinational corporations will have the opportunity to share their views on recent taxation developments during an extraordinary meeting of the tax rulings committee on 16 November. Google, Facebook and HSBC banking group have accepted the invitation, but the other enterprises that have been invited can still part.
Plenary vote on tax rulings recommendations
The plenary vote on the recommendations by the tax rulings committee is scheduled for the last week of November, so MEPs still have time to table amendments following the committee meeting with multinationals on 16 November.
Taxation deals for multinationals
It can be technically legal for multinationals to benefit from a preferential tax treatment, but that does not make it necessarily fair as people and small and medium-sized companies still have to pay their taxes in full. On 21 October the European Commission released two decisions, stating: "Luxembourg and the Netherlands have granted selective tax advantages to Fiat Finance and Trade and Starbucks, respectively." This is illegal under EU rules for state aid.
MEPs dealing with taxation issues have welcomed the Commission's decisions, calling it "an important step forward to tackling aggressive tax planning practices by multinational corporations in Europe".
Taxation levels across the EU
Our infographic above shows the income from direct and indirect taxes for each member states as well as total tax revenue as a percentage of the gross domestic product. The latter is divided between taxes on capital, consumption and labour. In addition to that our map shows how wealthy countries are.
This article was originally published on 23 October 2015.