European Parliament votes against tax evasion
European Parliament on July 6 passed draft recommendations for making corporate taxation fairer and clearer. They were approved by 514 votes to 68, with 125 abstentions.
With the recommendations, which were prepared by co-rapporteurs Michael Theurer (ALDE, DE) and Jeppe Kofod (S&D, DK) on behalf of Parliament’s Special Committee on Tax Rulings II, the MEPs are calling for the creation an EU register of beneficial owners of companies. The recommendations also include a tax havens blacklist, sanctions against non-cooperative tax jurisdictions, action against abuse of “patent box” regimes, a code of conduct for banks and tax advisors, tax good governance rules in EU trade agreements, a common consolidated corporate tax base (CCCTB) and a withholding tax on profits leaving the EU.
“Tax dumping is done at the expense of the general public and small- and medium-sized companies, who are the backbone of our European economy. In a fair tax system, multinational companies also pay their share and they should do so where they add value and make their profits,” said Theurer.
“With this report, Europe is stepping up to the plate on the fight against tax evasion and tax havens. We’re setting clear demands for increased accountability, effective deterrents in the form of markedly increased sanctions for tax havens, banks, tax advisors and companies, and we’re calling for increased European and international cooperation on this hugely problematic issue,” added Kofod.
According to an EU parliament press release, MEPs called for a common definition of “uncooperative jurisdictions” and said that the blacklisting procedure should include an “escalation” provision to allow for dialogue with the jurisdiction in which shortcomings have been identified before deciding to blacklist it.
Other recommendations include sanctions against non-cooperative jurisdictions and company managers and professionals involved in tax evasions.
The MEPs also called for an EU Commission proposal before the end of 2016 for a Common Consolidated Corporate Tax Base (CCCTB) and a code of conduct for banks, tax advisors, law and accounting firms. They have also proposed an EU-wide withholding tax, to be collected by member states, to ensure that profits made in the EU are taxed at least once before leaving it.
