EP takes stance on tax transparency, burdens, avoidance and evasion
Tackling tax evasion should be a top EU priority. EU countries and the European Commission should play a leading role in discussing how to fight tax fraud and aggressive tax planning in the OECD and other relevant fora, says Parliament in its resolution on tax, voted on Wednesday.
The resolution, which touches on a wide variety of tax related-issues, lays a basis for further parliamentary work on tax, inter alia fact finding by the Special Committee on Tax Rulings and the legislative work of the Economic and Monetary Affairs Committee. It was passed by 444 votes to 110, with 41 abstentions.
In the text, MEPs welcome the “tax transparency” package tabled by the European Commission on 18 March, but call for further effective proposals to be tabled in the coming months to combat tax havens and tax avoidance.
"The fight against aggressive tax planning, tax evasion and tax avoidance is in the spotlight of public concern. This European Parliament resolution sends a strong political message, by advocating immediate action for tax transparency, taxation with social justice, and taxation policies that boost growth in a business-friendly environment", said Eva Kaili (S&D, EL), who steered the text through Parliament.
Parliament insists that tax competition should be fair and transparent. It severely criticises member states that allow their tax authorities to make tax deals with multinational companies, even when the activities taxed take place elsewhere. "Secret tax rulings go to the detriment of other countries' tax systems and distort free competition", the resolution says.
MEPs also recommend:
- simplifying national tax systems so as to reduce the administrative tax burden on individuals and companies,
- doing away with obstacles that hinder cross-border activity,
- that more EU member states should join the eleven countries introducing a Financial Transaction Tax (FTT),
- introducing a Common Consolidated Corporate Tax Base (CCCTB) for EU companies and - as a second step - for all other companies too,
- taking action against harmful tax incentives on income from patent boxes (intellectual property rights),
- improving transparency around tax rulings, since they create opportunities for tax avoidance and tax competition,
- improving access for national parliaments to content of tax rulings,
- acting against selective tax benefits for certain companies,
- that the European Commission should prepare a blacklist, before July 2015, of tax havens and countries whose tax practices distort competition,
- suspending or revoking the banking or advisory licences of accountants, law firms and other financial advisors convicted of tax fraud,
- shifting tax burdens away from labour to other forms of taxation, and
- improving VAT collection.
Procedure: Non-legislative resolution
- “Tax evasion” means illegal arrangements whereby liability to tax is hidden or ignored
- “Tax fraud” is a form of deliberate tax evasion which is also generally punishable under criminal law
- “Tax avoidance” is the legal but improper use of the tax regime to reduce or avoid tax liabilities
- “Aggressive tax planning” is taking advantage of the technicalities of a tax system, or of mismatches between two or more tax systems, to reduce tax liability