A panel of EU lawmakers stepped up pressure on the bloc’s regulators on Tuesday (1 December), urging them to come up with concrete rules to clamp down on tax-dodging based on proposals from a special tax committee.
Many of the recommendations from the economic and monetary affairs committee at the Parliament are similar to the Commission’s action plan unveiled in June.
Tax reform efforts by the EU executive have yielded little success to date as EU member states usually resist any move against their tax regimes which are considered a sovereign issue.
However the latest push against tax-dodging may be more successful after the Commission’s competition unit launched investigations into several high-profile tax deals on suspicion of illegal state subsidies.
In October, it ordered the Dutch government to recover up to €30 million in back taxes from US coffee chain Starbucks and Luxembourg over Fiat Chrysler Automobiles. Cases against Apple and Amazon are pending.
Public anger on the issue grew after a group of investigative journalists uncovered tax deals that helped hundreds of multinationals reduce their tax bills to paltry sums, with some even enjoying tax rates below 1%.
The lawmakers’ recommendations include requiring companies to adopt country-by-country reporting on profit, tax and subsidies, implementing a common tax base, creating a common European Tax Identification Number and giving better protection to whistleblowers.
Parliament will vote on the suggestions on 16 December, after which the Commission will be given three months to either come up with a legislative proposal or explain why it does not plan to do so.
On 12 February 2015, the European Parliament decided to launch a special committee for an initial period of six months, to investigate the sophisticated tax rulings of EU member states that became the centre of a media storm earlier this year.
With 45 members and the same number of substitutes, the TAXE Committee's role is primarily to investigate the compatibility of tax rulings with the rules on state aid and tax law. The special committee has now drafted a report, including recommendations on how to improve transparency and cooperation between member states to the benefit of the internal market, European companies and citizens.
The report was debated in the European Parliament’s plenary session on 24 November, and its conclusions adopted by a large majority on 25 November 2015.