Members of the European Parliament’s Committee on Legal Affairs (JURI) called for stronger safeguards in relation to labour law and a tougher stance on tax optimisation during a debate on Monday 4 May with the Commissioner for Democracy, Justice, the Rule of Law and Consumer Protection, Michael McGrath, on the 'EUInc' proposal on a 28th regime for companies presented on 17 March (see EUROPE 13831/8).
Rapporteur René Repasi (S&D, German) said that the proposal was a step in the right direction, but that it “lacked sufficient safeguards” to protect workers and prevent harmful tax competition, stressing that “improvements” would be made during the legislative process.
“We still do not have the desired level of harmonisation in company law and we still have to deal with fragmented taxation”, said shadow rapporteur Axel Voss (EPP, German), acknowledging that this was a “very solid” basis for discussion.
The freedom to register a company under a single regime could lead to the creation of numerous shell companies, warned Pascale Piera (PfE, French). “You will encourage unfair competition between different social and tax systems”, she said, recalling the French Senate’s negative opinion on EUInc. She also criticised the possibility of granting stock options to employees, arguing that “in the long term, this renders salaried employment meaningless”.
“What we really want to avoid here is tax dumping”, added JURI Committee Vice-Chair, Mario Mantovani (ECR, Italian), while JURI Committee Chair, Ilhan Kyuchyuk (Renew Europe, Bulgarian) supported the proposal, stressing the need to avoid “friction” over national stock option regimes.
“There are many points of view on this proposal, which will be carefully examined and debated during the legislative process”, acknowledged Michael McGrath, while stressing that the proposal contained “appropriate safeguards” and maintained “the principle of simplicity”. He also stressed the objective of reaching a political agreement between the co-legislators by the end of the year.
The Commissioner assured that high labour standards would be “maintained”, that employee stock options were “no substitute for the right to a fair wage” and acknowledged the need for “adequate safeguards” in tax matters, “a high-risk area”. (Original version in French by Ana Pisonero Hernández)