Tax panel compels companies to testify
HSBC, Google, Facebook are among firms that will now appear after threat from MEPs on access to Parliament.
Several multinational companies have now dropped their opposition to appearing before a special European Parliament panel investigating allegations of tax avoidance in Europe.
HSBC said Tuesday it would participate in a hearing of the committee on November 16, joining Google and Facebook, which confirmed last week that they would also show up.
Sources said Tuesday that several other companies are expected to accept MEPs’ invitation to testify after several months of declining to appear. Many had been named in the “Luxleaks” revelations, which detailed special tax arrangements made by multinational firms with the government of Luxembourg.
The committee, known as TAXE, has given several other companies that previously refused to testify — including Ikea, AB InBev, Amazon and Barclays — until the end of next week to confirm whether they will appear. Other firms, including Total, Airbus, SSE and BNP Paribas, have already participated in hearings with MEPs.
“The others will be obliged to follow,” said the panel’s chairman, French MEP Alain Lamassoure. “Their absence means that they are pleading guilty.”
MEPs had already threatened to restrict access to the European Parliament for lobbyists for the companies that have not agreed to appear. However, European Parliament President Martin Schulz informed Lamassoure earlier this month that the institution does not have the legal power to suspend access to lawmakers for uncooperative companies.
The Parliament’s center-left Progressive Alliance of Socialists and Democrats group said last week its members would refuse to meet with those companies that have declined the invitation.
In another bid to change the reticent companies’ minds, MEPs sweetened their latest invitation, specifying they would like the firms to present their views on ongoing tax reforms. An earlier invite asked them to share their “experience” of Europe’s tax system.
The TAXE committee on Monday finalized its report on the tax loopholes, almost one year after the initial Luxleaks revelations were made public.
The report, which is non-binding, urges several tax reform measures, including country-by-country reporting for multinational companies on financial data including profits made, taxes paid and subsidies received.
The report will be submitted to the full Parliament in late November. Some members of the committee are hoping to extend the life of the temporary panel beyond that time, even though it was given a mandate only to issue the report. The Parliament’s center-right and conservative groups said they would oppose keeping the panel active and argued in favor of turning it into a a sub-committee of the Economic and Monetary Affairs Committee.
“When the report is voted on, the committee will have completed its work,” said Manfred Weber, chairman of the center-right European People’s Party group.
The survival of the committee depends on its ability to collect and to access documents. For several months panel members had targeted the work of the Council’s code of conduct on taxation — a group set by EU finance ministers in 1998 in which tax rulings were discussed. MEPs sought access to the agendas and minutes of the meeting but were refused, and when documents were provided to lawmakers they were often redacted.
The Council and the Commission proposed a month ago that lawmakers could have access to some documents on tax policy, granted with the authorization of EU countries involved and under a strict confidentiality clause. Several countries, including Luxembourg, Belgium, Netherlands, Sweden and the United Kingdom, refused access to the documents.
Quentin Ariès and Maïa de la Baume reported from Strasbourg; Nicholas Hirst reported from Brussels.