Main menu (press 'Enter')
Access to page content (press 'Enter')
Direct access to list of other websites (press 'Enter')
Tax rulings
Top story :

Work on fair and transparent taxation - The fight against secrecy and aggressive tax competition

Economic and monetary affairs / Taxation 08-06-2016 - 15:21 / Updated: 02-05-2017 - 10:31

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. An inquiry committee has also been set up to look into the Panama papers. MEPs are also working on plans to fight VAT fraud and update existing VAT rules. (Read more: On the agenda: corporate taxation, Panama papers, VAT reform)

MEPs have voted to return to the EU Commission its blacklist of countries deemed to be at risk of money laundering and terrorist financing. The list is too limited, and should be expanded, e.g. to include territories that facilitate tax crimes, they said before voting the resolution on Thursday. (Read more: MEPs reject EU Commission blacklist of states at risk of money laundering)

Fraud involving VAT on goods exported to other member states costs EU tax payers an estimated €50 billion a year. The European Commission has come up with an action plan to clamp down on VAT fraud and update current VAT rules that have been left unchanged since 1993. MEPs debate the action plan on Wednesday 23 November and vote on it the following day. Read on to find out more about Parliament's position and watch our video for an explanation of how VAT fraud works. (Read more: VAT reform: how MEPs intend to tackle the €50 billion a year fraud)

The European Commission's ruling that Apple should pay Ireland €13 billion in taxes has reignited the discussion of how much tax large companies should pay. Competition Commissioner Margrethe Vestager won wide support from MEPs when explaining the Commission’s approach in a plenary debate on 14 September. A week earlier we talked to German EPP member Markus Ferber, one of the Parliament's leading members on tax issues. Read on to find out what he had to say about the Apple ruling and tax deals. (Read more: Apple: "Attracting investment by granting tax deals is illegal in the EU")

Only death and taxes are certain in life - as the cliché goes - but that doesn't mean you have to like either. In the case of taxes, it's made worse by not everyone paying their fair share. According to the latest Eurobarometer survey commissioned by the European Parliament, 75% of all Europeans believe the EU should do more to fight tax fraud. Read on to find what the Parliament is currently working on to address the issue. (Read more: Tax fraud: 75% of Europeans want EU to do more to fight it)

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)

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)

It's vital Europe takes up the leadership in the fight against tax evasion, Nobel Prize-winning economist Joseph E. Stiglitz told Parliament's inquiry committee investigating the Panama papers on 16 November. Stiglitz, who served as an advisor to the Panama government following the revelations, said the US was unlikely to be effective in tackling the issue: "When your [future] president is evader-in-chief, it’s hard to have confidence in where we are going to go." (Read more: Stiglitz on fighting tax evasion: "Europe alone can have a very significant impact")

Competition Commissioner Margrethe Vestager won wide support from MEPs, in a Wednesday afternoon debate, for the Commission’s state aid verdict that the tax benefits that Ireland granted to Apple Inc., enabling it to pay substantially less tax than other businesses over many years, were illegal. (Read more: Wide support for Commission’s state aid verdict on Ireland’s tax deal with Apple)

The code of conduct for European Commissioners needs to be thoroughly tightened up, in order to prevent conflicts of interest for Commission members, and to help restore the faith of European citizens in today’s political institutions. This was the key message agreed by most MEPs during Tuesday evening’s debate with EU economic affairs Commissioner Pierre Moscovici, on the business ties of past and present Commissioners and the recent “Bahamas” leaks. (Read more: MEPs call for Commissioners’ code of conduct to be tightened up)

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)

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)

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 MEPs have adopted the recommendations from the Parliament's second special committee on tax rulings during the July plenary , we take a closer look at the jargon. (Read more: Taxing vocabulary: a glossary of fiscal terms)

REF. : 20150318TST35503
New measures to combat VAT fraud

Every year €170 billion goes missing due to EU-wide VAT fraud. This is why Parliament is calling for a reform of the EU’s 23-year-old VAT system. (11 October 2016)

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)