Loopholes used by some of the world’s multinationals to avoid paying tax were closed by Parliament in a vote on Thursday.

MEPs amended the EU’s anti-tax avoidance directive to prevent multinationals taking advantage of mismatches between EU and third countries’ tax rules to reduce their tax bills. The resolution was approved by 591 votes to 36, with 12 abstentions.


“These arrangements are frequently used by the largest companies with the sole purpose of reducing corporate taxation. We have seen it in both the Apple case and in the McDonald’s case. It is about time these corporations paid their fair share of taxes,” said rapporteur Olle Ludvigsson (S&D, SE).


If EU ministers back these amendments, corporations established in two jurisdictions (inside and outside the EU) for example, will no longer be able to have the same expenditure deducted from tax in both jurisdictions.


MEPs also want to put an end to the practice of having a payment recognised as tax deductible in one jurisdiction but not recognised as taxable income in the other.


The report now goes to the Council for their consideration and final approval.


Procedure:  Consultation