Brussels, 15/06/2015 (Agence Europe) - The chairman of the European Parliament's special committee on tax rulings (TAXE), Alain Lamassoure, warned the European Commission on Monday 15 June against the temptation of dragging its feet over the question of clamping down on corporate tax evasion.
Lamassoure did not appreciate reading in the press that the European Commission is planning to give itself 18 months to re-launch its draft common consolidated corporate tax basis (CCCTB). Lamassoure said at a press conference that when unveiling its action plan on Wednesday (see EUROPE 11331 and 11332 for details), the Commission should unveil new draft CCCTB legislation as soon as possible and scrap any mention of 18 months. He said the Commission must avoid dragging its feet, saying that the subject is complicated and it needs time to come up to date on CCTB because it doesn't need any extra time. Lamassoure said that 18 years ago, the 15 member states of the time reached unanimous agreement on harmonising the tax basis. He said he was “divided” over the Commission decision to postpone the consolidation aspect.
Over a press breakfast, Greens/EFA MEP Molly Scott Cato (United Kingdom) said there wouldn't be full consolidation because multinationals will always find wriggle room: “Loopholes can be exploited until there is full consolidation.”
Alain Lamassoure wants the Commission to take account of the EP's Thyssen Report of 2012 that calls for the cost of research and development to be considered as deductible expenditure. The Thyssen Report says that the cost of emitting own finance or loans to cover operating needs should also be deductible. As we explained in an article last week, the Commission will say in its action plan that it wants to consider further developing the question of favourable treatment of expenditure for R&D in its current proposal. It is also planning to see whether to address the question of balancing of how debt and capital emission on the markets is dealt with fiscally (corporate debt equity bias) in order to give greater weight to the planned Capital Union.
The French government is delighted that the Commission is planning to say it wants to take advantage of the reworking of the interest and royalties directive to make sure tax is actually paid. There is talk of making sure that income is taxed at least once (minimum effective taxation) and the idea of looking into the reworking of the interest and royalties directive to this end is described by the French as a highly concrete step towards rapid action (otherwise, in the medium-term, it would be a matter of using the CCCTB).
Lamassoure advised countries that considerations of what is going on in Hong Kong or Singapore must not prevent Europe from moving towards a common tax basis.
Lamassoure said it wasn't “scandalous” to want to carry out an impact assessment on country-by-country reporting. Quizzed about the EEP's position on the amendments to this end to the shareholder rights directive that is currently being negotiated at the EP, Lamassoure said he personally approved of it. He wants what he calls a “coherent vote” by the legal affairs committee (JURI) and the special committee on tax rulings (TAXE). To this end, the question should be the subject of political agreement among the big parties and the draft should be written to be workable. Co-president of the Greens/EFA group, Philippe Lamberts, said that the previous Commission's Financial Services Commissioner, Michel Barnier (EPP), had agreed with the EP against the Council when similar demands had been introduced on financial institutions in CRDIV. Lamberts said she had discussed the matter with the head of the ALDE group, Belgium's Guy Verhofstadt, who had told her he supported country-by-country reporting, but had problems with other aspects of the shareholders' rights directive. Lamberts therefore sees room for negotiation here.
On the question of the special TAXE committee, her German ally Sven Giegold regrets the absence of multinationals from the public hearing. He said that access badges for the EP buildings should be withdrawn for companies that won't attend hearings but turn up instead to lobby politicians.
Giegold said that during a visit by the TAXE committee to a ministry in Luxembourg, “the head of tax administration recognised the lack of economic substance linked to the tax rulings.” He couldn't deny it, said Alain Lamassoure, when asked to confirm this.
Lamassoure said that a draft TAXE committee report would be ready in July, and a vote was hoped for at the second plenary in November. (Elodie Lamer)