Member states' political will 'pivotal' to tax transparency

MEPs have welcomed commission tax transparency package but 'await much more in the coming months'.

By Julie Levy-Abegnoli

18 Mar 2015

The European commission has presented its first package to increase tax transparency in the EU, which is expected to come into force as of next year. The proposal would force member states to automatically exchange information on tax rulings issued to companies.

The new rules come with the college still rocking from last years 'LuxLeaks' scandal and commission president Jean-Claude Juncker's alleged involvement in suspicious tax deals made with large multinational companies. 

MEPs had called for EU-wide harmonisation of tax practices, and a special committee on tax rulings has been set up.

"The compulsory and automatic exchange of information about every single tax deal between member states and individual companies is absolutely necessary and must be adopted as soon as possible" - Burkhard Balz

Burkhard Balz, EPP group spokesperson in parliament's economic and monetary affairs committee, as well as the new special tax committee, welcomed the commission's announcement, saying, "the compulsory and automatic exchange of information about every single tax deal between member states and individual companies is absolutely necessary and must be adopted as soon as possible".

However, he cautioned, "fighting tax evasion must not increase red tape. If every single company which does business in other member states must report its activities in every country, we will start an avalanche of new bureaucracy - this might even become an obstacle to the single market".

The Socialists were also pleased with the proposed measures, but S&D group president Gianni Pittella stressed that "transparency is the first step, but now we have to turn these morally unacceptable practices into legally banned and pursued offences".

However, Elisa Ferreira, S&D co-rapporteur on the special tax committee, said, "I am disappointed that the commission has not taken this opportunity to come up with proposals for a common European definition of tax havens and for the creation of a blacklist of firms that evade tax - and those that advise them".

Ferreira's ALDE counterpart, Michael Theurer, was also underwhelmed by team Juncker's announcement, highlighting, "we expect much more to come from the commission in the coming months".

Liberal vice-chair Sophie In 't Veld stressed, "the ball is now in the court of EU member states, who will be forced to show their true colours - will they put their money where their mouth is and finally move forward, or will they continue to block the proposals? The political will of the national governments will be pivotal".

The commission might have a tougher time convincing ECR MEPs to adopt its proposals, with Morten Messerschmidt, group spokesperson on parliament's special tax rulings committee, saying, "there is a strong drive by Juncker and many [deputies] to exploit the 'LuxLeaks' saga and fulfil their fantasies of EU tax harmonisation". 

He insisted that the Conservatives "will stand firm against any efforts to harmonise taxation - it is a competence that must remain at member state level and any efforts towards harmonisation would sound the death knell for Europe's competitiveness".

MEPs are now due to discuss the draft law and propose any amendments. If adopted, it could become effective as early as January 2016.

 

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