Brussels, 16/11/2015 (Agence Europe) - The Conference of the Presidents of the European Parliament will look into the question of a six-month extension of the mandate of the special TAXE committee on tax rulings, the political coordinators decided unanimously (the ECR group was absent) on Monday 16 November.
On the same day, several multinationals reported to the special committee for five hours of hearings, having been threatened with losing their contacts with the MEPs.
During the first salvo of hearings, immovable positions emerged on the question of country-by-country reporting, which the EP and NGOs want to be public, whilst the OECD recommends reporting to the tax administrations only. This would require companies to provide certain accounting data for each individual country, such as tax paid, number of employees, profits, etc. The banks HSBC and Barclays, which spoke before the TAXE committee, said that they were in favour of public reporting. However, although the Commission is currently carrying out an impact assessment to see whether to go further than the OECD, a public reporting obligation is already in place for banks under the 'CRD IV' directive. Barclays explained that it goes beyond the requirements of 'CRD IV' in this matter.
The representative of Amazon started off by explaining that the OECD action plan to fight aggressive tax planning, known as BEPS, must be implemented in a “coordinated and consistent way”. European companies fear for their competitiveness, if they are the only ones which have to implement public reporting. Amazon argues that reporting must be a tool for the tax administrations, but the multinational does not support public reporting. Amazon and, later, Google, stressed that tax is paid on profits, not turnover. In 2013, for instance, Amazon made losses at global level. One of the arguments often invoked by those hostile to public reporting is that it is very difficult to interpret the data in question.
Despite the insistence of MEP Sven Giegold (Greens/EFA, Germany), Google declined to state whether or not it was in favour of public reporting. “We undertake to observe the rules and the rules are defined by the governments”, Google explained, by way of answer. Facebook gave a similar reply, explaining that the company would comply with the rules applicable in the EU.
More generally, the multinationals which appeared argued in favour of a common corporate tax base.
Amazon, for instance, explained that a common tax base would reduce compliance costs and the complexity of the various tax systems for business. “We agree with comments that without consolidation, most of the benefits of the common tax base would not materialise”, the representative of Amazon added. The Commission hopes to relaunch its common tax base project, but in view of problems at the Council over the 'consolidation' aspect, it plans to move forward in two stages, starting with just the common tax base. Facebook explained that in order for businesses to invest in a country, they require visibility and a better overview of the tax rules. Barclays argued that a common tax base should be accompanied by greater harmonisation in the accounting standards, whilst HSBC said that a common tax base would not necessarily lead to situations of double taxation.
Facebook and Google came under intensive questioning from the MEPs Peter Simon (S&D, Germany), Alain Lamassoure (EPP, France) and Michael Theurer (ALDE, Germany) for having registered their intellectual property in the Cayman Islands and Bermuda respectively. The representative of Facebook referred to a “conservative attitude” which consists of selecting a neutral place for intellectual property. Google explained that it was not a matter of dodging tax, but deferring it. (Original version in French by Élodie Lamer)