The European Parliament adopted by 500 votes to 122,
with 81 abstentions, a resolution with recommendations to the
Commission on bringing transparency, coordination and convergence
to corporate tax policies in the Union.
These recommendations build on the work of
Parliament’s Special
Committee on Tax Rulings (TAXE Committee), set up in the wake
of the “Luxleaks” revelations.
While respecting Member States' sovereignty in
relation to tax policy, Parliament stated that there is a need for
EU legislative measures to improve transparency, coordination and
convergence within corporate tax policies in the Union.
The resolution lists a series of measures that call
for the Commission to submit to Parliament by June 2016 one or more
legislative proposals, following the detailed recommendations set
out below:
Transparency: Parliament
called on the European Commission to:
- increase, as a priority, transparency in the area of
corporate taxation in order to improve tax collection which will
make the work of tax authorities more efficient and ensure an
increase in public trust and confidence in tax systems and
governments;
- take all the necessary steps to introduce by the first
quarter of 2016 comprehensive and public country-by-country
reporting (CBC-R) for all multinational companies, in
all sectors;
- create, as soon as possible, on a voluntary
European 'Fair Tax Payer' label for companies who engage in
good tax practices. Companies should be motivated by the label to
make paying a fair share of taxes an essential part of their
corporate social responsibility policy;
- establish a new mechanism whereby Member States
are compelled to inform other Member States and the Commission
without delay if they intend to introduce a new allowance, relief,
exemption, incentive or similar measure that could have a material
impact on the effective tax rate in the Member State or on the tax
base of another Member State;
- bring forward a legislative proposal to protect
whistleblowers.
Coordination: Parliament
called on the European Commission to:
- present a legislative proposal for the introduction of
a common consolidated corporate tax base (CCCT). More
specifically, as a first step, by June 2016, a mandatory Common
Corporate Tax Base in the Union which subsequently should be
consolidated (CCCTB). During the interim period between the
introduction of mandatory CCTB and that of full CCCTB, a set of
measures to reduce profit shifting (mainly via transfer
pricing) including as a minimum a Union anti-Base Erosion and
Profit Shifting (BEPS) legislative proposal (BEPS are tax planning
strategies that exploit gaps and mismatches in tax rules to
artificially shift profits to low or no-tax locations where there
is little or no economic activity, resulting in little or no
overall corporate tax being paid);
- strengthen the mandate and improve transparency of the
Council Code of Conduct Working Group on Business
Taxation;
- continue to provide guidance regarding “patent
boxes” which are special tax regimes for intellectual
property revenues:
- bring forward proposals for common European
standards and definitions on what qualifies as the promotion of
research and development, and what does not, and for harmonising
the use of patent and innovation boxes;
- bring forward a proposal to amend the Directive
2011/16/EU on administrative cooperation in the field of taxation
in order to ensure more effective simultaneous tax audits and
controls where two or more national tax authorities decide to
conduct controls of one or more persons of common or complementary
interests;
- table a proposal for a European Tax Identification
Number (TIN);
Convergence: Parliament
called on the European Commission to:
- table a legislative proposal to allow the Union to
speak with one voice in relation to international tax
arrangements;
- negotiate tax agreements with third countries on
behalf of the Union instead of the current practice under which
bilateral negotiations are conducted, which produce sub-optimal
results;
- create a common and cogent definition of 'tax
havens'. In this regard, the Commission should put forward a
revised list of tax havens, which would replace its interim
list as put forward in June 2015. A catalogue of counter-measures
should be created for those who use tax havens. These
counter-measures may include being banned from accessing state aid
or public procurement opportunities at Union or national
level;
- improve the Transfer Pricing framework in the EU so as
to: (i) reflect the economic reality of the internal market; (ii)
provide certainty, clarity and fairness for Member States and for
companies operating within the Union; (iii) reduce the risk of
misuse of the rules for profit shifting purposes;
- harmonise national definitions of debt, equity, opaque
and transparent entities, harmonise the attribution of assets and
liabilities to permanent establishment, and harmonise the
allocation of costs and profits between different entities within
the same group;
- bring forward a proposal by summer 2016 to improve
the current mechanisms to resolve cross-border taxation
disputes in the Union, not only focusing on cases of double
taxation but also double non-taxation;
- introduce a withholding tax or a measure of
similar effect, to ensure that all profits generated within the
Union, and due to leave, are effectively taxed within the Union
before they leave the Union’s borders;
- address the tax gap by, inter alia: (i)
investigating sources of low efficiency regarding tax collection,
including VAT collection; (ii) ensuring that tax authorities have
full and meaningful access to central registers of beneficial
ownership for both companies and trusts, and that those registers
are properly maintained and verified.