Parliament spells out the legal steps needed to improve corporate tax transparency, coordination and EU-wide policy convergence in a resolution voted on Wednesday., Parliament’s drive to persuade EU member states to act to counter aggressive corporate tax planning and evasion by multinationals in Europe was triggered by the November 2014 “Luxleaks” revelations about Luxembourg’s dubious tax deals with them.
The resolution, prepared in Parliament's Economic and Monetary Affairs Committee, was passed by 500 votes to 122, with 81 abstentions. The EU Commission will have to respond to every legal recommendation, even if it does not submit a legislative proposal.
“This report shows the determination of both the European Parliament and the people of Europe to see real legislative change to prevent companies jumping across borders to reduce their tax bills to almost zero. The 'Luxleaks' scandal showed how much these corporations have been getting away with, dodging tax that could have been used to build schools, hospitals or pay down national debt”, said co-rapporteur Anneliese Dodds (S&D, UK).
"Corporate tax avoidance represents tens of billions in losses to national budgets every year, leads to unfair competition between firms and undermines the trust of European citizens in states and governments", said co-rapporteur Luděk Niedermayer (EPP, CR), adding that "Rapid adoption of measures proposed by Parliament and the OECD would provide an unique opportunity not only to improve national tax collection, but also to guarantee fairer corporate tax competition and to reduce compliance costs for businesses."
Recommended legal steps
The recommended legal steps build on the work of Parliament’s Special Committee on Tax Rulings, whose recommendations were approved at the 26 November plenary session.
MEPs ask the Commission, inter alia, to:
The Commission will have three months to respond to the recommendations, either with a legislative proposal or with an explanation for not doing so.
Meanwhile, Parliament has agreed on a new six-month mandate for the Special Committee on Tax Rulings, which includes close monitoring of the legal initiatives related to corporate taxation and further fact finding. The new committee will also follow up on on-going work by international institutions, including the OECD and G20.
Procedure: Legislative Resolution
Press conference: 16 December at 14:30