Brussels, 25/06/2015 (Agence Europe) - The debate at the European Parliament on Wednesday evening about the European Commission's company tax action plan revealed that the debate will be tough-going because the remedies recommended by some cross the red lines of others.
British MEP Kay Swinburne (ECR) said that the common corporate tax basis was not the solution and it would be better to implement the end result of the OECD's work in the member states, while Elisa Ferreira (S&D, Portugal) called for a tax basis to be set that was not just common but also consolidated. In its relaunch of the common consolidated corporate tax base (CCCTB), the European Commission has decided to temporarily shelve the consolidation side and focus on the common base instead. The negotiating position adopted by the EPP group on Wednesday is highly revealing because it calls for a “mandatory corporate tax base” without mentioning consolidation. During the debate, Peter Simon (S&D, Germany) stressed the importance of consolidation. Marian Harkin (ALDE, Ireland) explained that the problem with the CCCTB for small member states was finding the formula for calculating the share of profits.
For the Commission, Employment and Social Affairs Commissioner Marianne Thyssen told MEPs that consolidation would remain an important objective and the Commission would not be dropping its level of ambition.
Earlier in the week, German MEP Michael Theurer (ALDE) told British newspaper The Guardian that he had it directly from David Gauke, financial secretary at the British treasury, that the United Kingdom would not follow the recommendation for the CCCTB, which requires unanimous agreement.
MEPs are divided over country-by-country reporting and the Commission has taken a cautious line (to put any draft legislation to public consultation), and some MEPs regretted the slow pace of progress at the Commission. This criticism was made by Anneliese Dodds (S&D, UK). All the same, Molly Scott Cato (Greens/EFA, UK) and Marian Harkin called for the proposal to be voted upon as part of the rewriting of the shareholders' rights directive in the EP's July plenary. The EPP's negotiating position says that an in-depth analysis of country-by-country reporting is required before anything is proposed, and developments at the OECD in this connection need to be taken into account to ensure a “level playing field.” The OECD wants tax information provided as part of this reporting to be submitted by multinationals to tax offices, but amendments to the EU shareholder rights directive foresee public disclosure. Kay Swinburne said that the OECD's line needed to be followed. Marianne Thyssen assured MEPs that the Commission would be working very seriously on this issue.
Anneliese Dodds regretted that at this stage, the Commission had not included any protection for whistleblowers or a common definition of tax havens. Alain Lamassoure (EPP, France), chair of the EP's special committee on tax rulings (TAXE), baldly stated that taxation was far too important a subject to be left in the hands of finance ministers alone and it was at the European Summit that action was needed. He said the European Council needed to address the matter before the end of the year.
Lobby group monitoring centre, Corporate Europe, has strongly criticised the composition of the expert group set up by the European Commission in January on transfer prices. It includes eight company representatives, two academics and 3 NGO representatives. Corporate Europe points out that auditors “PwC, Deloitte and KPMG - are all represented, although not always transparently. Each has recently been embroiled in the major tax scandals LuxLeaks, helping design tax avoidance schemes for their clients. European Commission has invited to its new advisory group on taxation the very same organisations involved in avoiding it, as well as their tax advisors (again!).” (Elodie Lamer)