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Tax rulings
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Fairer corporate taxation - The fight against aggressive tax competition

Economic and monetary affairs / Taxation 08-06-2016 - 15:21 / Updated: 23-06-2016 - 16:35
 
 

In order to clamp down on aggressive tax competition, MEPs are demanding transparent corporate taxation and a better coordination among EU countries. The European Parliament has also set up two special committees on tax rulings to look into allegations that some EU countries are using special tax regimes to favour large corporations. Check out our top story to find all relevant articles, interviews and videos on the subject. (Read more: Corporate taxation: Parliament demands transparency and EU-wide coordination )

The EU Commission proposal for an EU anti-tax avoidance directive was welcomed by Parliament in a resolution voted on Wednesday. MEPs nonetheless advocated stricter limits on deductions for interest payments and tougher rules on foreign income. They also called for more transparency for trust funds and foundations, common rules for “patent box” tax reductions on intellectual property earnings, and an EU blacklist of tax havens and sanctions against uncooperative jurisdictions. (Read more: Parliament calls for crackdown on corporate tax avoidance)

Tax avoidance by companies cost EU countries €160-190 billion in lost revenue a year. MEPs discussed new measures to fight the most common practices on Tuesday 7 June and vote in favour of them the following day. Read more about the legislation and check our infographic that shows corporate tax rates and respective tax income by member state. (Read more: Corporate taxation: the fight against tax avoidance)

Corporate tax avoidance costs EU countries €50-70 billion in lost revenue a year, according to the European Commission. On 2 February it discussed with MEPs how it plans to make corporate taxation fairer and more efficient. The Lux Leaks scandal showed that EU countries sometimes court multinationals with advantageous tax schemes. Parliament has set up two special committees to investigate and called on the Commission to introduce legislation to restrain these practices. (Read more: Corporate taxation: Commission to discuss its plans for fairer taxes with MEPs)

Multinationals should pay their taxes where they make their profits, according to one of the recommendations by the tax rulings committee, which were adopted by MEPs on 25 November. Report authors Elisa Ferreira (S&D, Portugal) and Michael Theurer (ALDE, Germany) told us it had been difficult for the committee to get answers from multinationals and member states during its nine-month investigation, but that its recommendations could lead to fairer tax competition. (Read more: Interview: how the tax rulings committee came up with plans for a fairer system)

The ultimate owners of companies will have to be listed in central registers in EU countries, open both to the authorities and to people with a "legitimate interest", such as investigative journalists, under new rules already agreed with the Council and endorsed by Parliament on Wednesday. The new anti-money laundering directive aims to step up the fight against tax crimes and terrorist financing. New rules to make it easier to trace transfers of funds were also approved. (Read more: Tougher rules on money laundering to fight tax evasion and terrorist financing)

The European Parliament rejected a motion of censure against Commission President Jean-Claude Juncker’s team on Thursday, with 461 votes against, 101 in favour and 88 abstentions. The motion was tabled by 76 EFDD and non-attached MEPs further to the "Lux leaks" plenary session debate with Mr Juncker on 12 November. A debate on the motion was held on Monday. (Read more: Motion of censure against the Commission rejected by a large majority)

Commission President Jean-Claude Juncker appeared in person for Parliament’s extraordinary debate on the fight against tax avoidance, prompted by the recent revelation of secret deals granting preferential tax treatments to multinational companies in Luxembourg. (Read more: MEPs call for tax harmonisation and transparency on national tax rulings in 'Lux leaks' debate)

The European Parliament named the 65 members of its “Panama Papers” Committee of Inquiry, into tax evasion and money laundering, on Thursday, after approving its remit on 8 June. The committee’s shorthand label will be “PANA”. (Read more: Parliament names “Panama Papers” inquiry committee members )

The European Parliament agreed to set up an inquiry committee into the “Panama Papers” revelations, of detailed information on offshore companies and their ultimate beneficiaries, in a vote on Wednesday. The committee is to investigate alleged contraventions and maladministration in the application by the EU Commission or member states of EU laws on money laundering, tax avoidance and tax evasion. It will have 65 members and twelve months to present its report. (Read more: Parliament sets up “Panama Papers” inquiry committee )

The fight for fair taxation in the EU has been high on Parliament's agenda long before LuxLeaks and the Panama papers. Since the start of the economic and financial crisis, MEPs have been pushing for greater transparency and an end to tax unfair practices. Read on for our overview of Parliament initiatives. (Read more: Overview: the European Parliament's work on taxation)

Parliament sets out its ideas on how to make corporate taxes fairer across Europe in a resolution voted on Wednesday. MEPs urge EU member states to agree on mandatory country-by-country reporting by multinationals of profits and taxes, a common consolidated corporate tax base, common definitions for tax terms and more transparency and accountability with regard to their – so far secret - national tax “rulings” for companies. (Read more: Parliament calls for corporate tax makeover)

The work of Parliament’s Special Committee on Tax Rulings will be continued under a new mandate for six months, starting on 2 December. This was decided unanimously at Wednesday’s Conference of Presidents and endorsed by Parliament as a whole, by 561 votes to 69 with 5 abstentions. The committee's work will focus on harmful corporate tax regimes and practices at European and international level. (Read more: Special Committee on Tax Rulings II, "The Sequel")

The EU member states’ deal on plans for them to exchange details of their tax rulings for multinationals automatically was a “missed opportunity” to take a big step forward in fighting aggressive tax planning and unfair tax competition, says Parliament in an opinion voted on Tuesday. MEPs are unhappy that the 6 October deal unduly restricts both the scope of the draft “automatic exchange” directive and the European Commission’s access to this information. (Read more: Council deal on automatic exchange of tax rulings is a “missed opportunity”)

Are multinational companies paying their fair share of taxes? While the European Commission launched a series of inquiries in all EU member states, the Parliament has set up its own special committee to investigate into tax rulings involving large international companies. We talked to committee chair Alain Lamassoure, a French member of the EPP group, to find out his views and expectations. (Read more: Lamassoure on tax rulings committee: "We have an obligation to produce results")

Large firms and listed companies should have to disclose information, country by country, on profits made, tax paid on profits and public subsidies received, said MEPs on Wednesday in amendments to draft rules intended to boost transparency and foster shareholders’ long-run commitment to companies. They also want to empower shareholders to vote at least every three years on directors' pay policy. (Read more: Corporate governance: MEPs vote to enforce tax transparency)

Paying taxes can be complicated, but so can the vocabulary that goes with it. Tax avoidance is legal, but tax evasion isn't and just what exactly is base erosion? As the Parliament's special committee on tax rulings holds a meeting on Monday 1 June to discuss the international aspects of tax rulings, we take a closer look at the jargon. Read on for an explanation of the terms used and follow the hearing live online from 14.00 CET. (Read more: Taxing vocabulary: a glossary of the terms used by the tax rulings committee)

REF. : 20150318TST35503
 
 
Work of the second tax rulings committee
 

MEPJeppe Kofod explains Parliament's demands and the difference between the tax rulings special committee and the Panama papers inquiry committee (21 June 2016)

 
Panama papers inquiry committee explained
 

The inquiry committee will investigate whether EU countries and the European Commission failed regarding money laundering, tax avoidance and tax evasion. (8 June 2016)

 
Parliament's recommendations
 

MEPs draw up proposals for clearer and more coordinated tax rules (15 December 2015)

 
Ending bank secrecy
 
€160-190 billion
is how much EU countries miss out on due to corporate tax avoidance.
(Read more)
Parliament's research service
 
Multinationals appear before tax rulings committee
 

MEPs have questioned representatives froml Apple and Google over their tax bills in Europe (15 March 2016)

 
First tax rulings committee
 
How does a tax ruling work?
 

This EuroparlTV animation explains how it works (22 June 2015)