Protecting the tax avoiders: TAXE extension, ECOFIN compromise, BEPS recommendations
A meeting of the European Parliament's political group coordinators will decide tonight on the possible prolongation of the Special Committee on Tax Rulings and Other Measures Similar in Nature or Effect (TAXE).
Today, the OECD presented the final recommendations of its (Base Erosion and Profit Shifting (BEPS) Project. Tomorrow, the ECOFIN Council will endorse a compromise on the European Commission's March 2015 proposal for an automatic exchange of information related to tax rulings between member states' tax administrations.
GUE/NGL Shadow Rapporteur for TAXE, Fabio De Masi, comments: “It would be truly embarrassing for the Parliament and a slap in the face of every honest tax payer in Europe to now stop the investigative work of TAXE as Conservative groups have requested. In light of the massive investment gap in the EU, the disastrous consequences of austerity policies and the epochal refugee crisis, we cannot turn a blind eye to the 1 trillion euros lost every year to the combined effect of tax avoidance and tax evasion.”
“TAXE was not able to fulfil its mandate and investigate those responsible for LuxLeaks and other scandals relating to multinationals avoiding corporate tax. GUE/NGL has called for a full inquiry committee since the LuxLeaks revelations, a move that is still being blocked by Conservatives, Social-Democrats and Liberals.
“The least the Parliament could do would be to extend TAXE's mandate in order to complete the current mission. This is not possible without full cooperation by the Council, the Commission and member states with respect to requests for documents; many of which currently remain unanswered.
“There is also a need for further investigation into Jean-Claude Juncker's statements at the TAXE hearing last month. He backtracked already on significant points and his arguments on others seem shaky. We call for him to be questioned again, together with former Minister for the Economy of Luxembourg and author of the so-called Krecké report, Jeannot Krecké, and investigative journalist, Véronique Poujol.
“As TAXE's work remains incomplete, Parliament should now vote on an interim report only.”
Assessing the ECOFIN compromise and BEPS recommendations, De Masi adds: “These are prime examples of bad compromises or the result of governments that have orchestrated the EU-wide tax dumping then getting together to make 'reforms'.
“The Commission proposal on the automatic exchange of information on tax rulings between member states already lacked the crucial aspect of transparency. Without public scrutiny, scandals like LuxLeaks are certain to occur again. Yet, governments in ECOFIN further watered down the proposal, excluded the Commission from much of the exchange of information and shut the door to some impartial scrutiny. They also dumped the idea of exchanging a significant number of ongoing tax rulings from the past in favour of only assessing a limited number of these 'sweetheart' tax deals between governments and companies.
“The OECD, likewise, is today presenting more of a fig leaf than a breakthrough on the issue of corporate tax avoidance. Its proposals add yet more complexity to international rules without challenging the outdated principle of separate taxation of national entities and transfer pricing 'at arm's length'. Its 'transparency' provisions consist of country-by-country reporting to be made available only to the tax administrations of some rich countries, and compulsory only for 20 per cent of the largest multinational companies. A further critical failure is the lack of restrictions on patent boxes which are currently put in place by more and more countries to allow multinationals escape higher taxation elsewhere.”
GUE/NGL Press Contact:
Nikki Sullings +32 22 83 27 60 / +32 483 03 55 75
Gay Kavanagh +32 473 84 23 20
European United Left / Nordic Green Left
European Parliamentary Group