Agreements enabling multinationals to avoid paying taxes
Question for written answer E-001009-16
to the Commission
João Ferreira (GUE/NGL)
Because of the tax advantages granted by Belgium under a tax arrangement for ‘surplus profits’, the 35 multinationals — mostly EU companies — which have apparently benefited have not had to pay tax on their profits. The arrangement, which reduced the taxable amount of corporation tax by 50% to 90%, constitutes an illegal tax advantage. Belgium will now have to recover the full amount of unpaid taxes, about EUR 700 million in all.
Other countries, for example Luxembourg and the Netherlands, also used to have secret agreements with multinationals to save them from paying taxes.
One point to be made about the Commission’s ‘recovery’ decision is that even if the multinationals have to pay what they owe — that is to say, the taxes that they did not pay before — to the Member States concerned, this will not make good the damage done to the other Member States, the victims of the tax avoidance which the agreements in question served to encourage, or to small and medium-sized enterprises, the victims of unfair competition.
How can the Commission ensure that ‘crime doesn’t pay’? In particular, what steps will be taken to make good, and compensate for, the damage to Member States harmed by the above schemes to the extent that these involved transfers of profits?