Activities of Ernest URTASUN related to 2021/2097(INI)
Plenary speeches (1)
European Withholding Tax framewor (debate)
Shadow reports (1)
REPORT on a European Withholding Tax framework
Amendments (30)
Amendment 2 #
Motion for a resolution
Citation 19 a (new)
Citation 19 a (new)
— having regard to the European Banking Authorities’ report of 11 May 2020 on cum/ex, cum/cum and withholding tax reclaim schemes,
Amendment 15 #
Motion for a resolution
Recital B
Recital B
B. whereas high flows of royalty, interest or dividend payments through a certain jurisdiction indicate that profits are being rerouted with the sole purpose of reducing the tax burden; whereas such countries are referred to as conduit jurisdictions; whereas studies21a indicate the leading role of the Netherlands and Ireland in channelling passive income flows to tax havens; _________________ 21ahttps://theconversation.com/these-five- countries-are-conduits-for-the-worlds- biggest-tax-havens-79555; https://www.cpb.nl/en/conduit-country- the-netherlands-in-the-spotlight; https://ec.europa.eu/taxation_customs/syst em/files/2018- 03/taxation_papers_71_atp_.pdf
Amendment 16 #
Motion for a resolution
Recital B a (new)
Recital B a (new)
B a. whereas aggressive tax planning structures can be grouped into three main channels: (i) royalty payments; (ii) interest payments and (iii) transfer pricing22a showcasing the importance of passive income flows in tax avoidance and evasion; _________________ 22a https://ec.europa.eu/taxation_customs/syst em/files/2018- 03/taxation_papers_71_atp_.pdf
Amendment 19 #
Motion for a resolution
Recital D
Recital D
D. whereas withholding taxes can reduce the risk of tax evasion and avoidance, thus remaining a reliable policy tool until the implementation of the above-mentioned agreement by the G20/OECD Inclusive Framework on BEPSare an effective tool to protect a domestic tax base and secure source based taxation, in addition withholding taxes are an effective instrument to comhat profit shifting to low-tax jurisdictions;
Amendment 23 #
Motion for a resolution
Recital D a (new)
Recital D a (new)
D a. whereas changes at European and Member State level in the withholding tax system should be tightly integrated with the existing and upcoming anti-tax avoidance provisions such as the implementation of the above-mentioned agreement by the G20/OECD Inclusive Framework on BEPS;
Amendment 24 #
Motion for a resolution
Recital D b (new)
Recital D b (new)
D b. whereas the Netherlands as a response to the large outbound flows of passive income to low tax jurisdictions has introduced a conditional withholding tax on outbound royalty and interest payments at a rate of 25% and will introduce a similar withholding tax on dividends as of 2024;
Amendment 25 #
Motion for a resolution
Recital E
Recital E
E. whereas complex refund procedures increase the risk of tax fraud and avoidance schemes as demonstrated by the Cum-Ex revelations, it also increases the administrative burden for cross-border investments and may create an obstacle to market integration;
Amendment 35 #
Motion for a resolution
Recital F
Recital F
F. whereas the Interest and Royalties Directive (IRD) and the Parent-Subsidiary Directive (PSD) both exempt certain cross- border payments that take place within the EU and are related to interest, royalties and dividends from withholding tax with the aim of eliminating double taxation; whereas negotiations on a revision of the IRD have stalled in the Council for several years;both IRD and PSD effectively gave taxing rights entirely to the residency countries incentivizing both companies to shift mobile profits to low-tax jurisdictions within the EU and Member States to engage in a detrimental race to the bottom23a; whereas negotiations on a revision of the IRD have stalled in the Council since 2012; _________________ 23aOpening Statement by Prof. Nadine Riedel in public hearing in FISC subcommittee in the European Parliament on the 27th of October.
Amendment 37 #
Motion for a resolution
Recital F a (new)
Recital F a (new)
F a. whereas commentators warned after the adoption of the IRD that abolishing withholding taxes within the EU encouraged tax competition; whereas in conclusion the IRD and the PSD are the root causes of aggressive tax competition in the EU and have led to double non-taxation and a race to the bottom; whereas this situation can only be overturned with the application of stringent anti-base erosion rules or the introduction of minimum rates on interest, royalty and dividend payments in the EU;
Amendment 42 #
Motion for a resolution
Recital F b (new)
Recital F b (new)
F b. whereas tax treaty networks can be exploited to route income to reduce taxes; whereas no outbound withholding taxes on such outbound payments combined with no withholding taxes within the EU facilitated aggressive tax planning and treaty shopping behaviour to exploit differences in the treatment of outbound payments across the EU;
Amendment 45 #
Motion for a resolution
Recital F c (new)
Recital F c (new)
F c. whereas on 26 February 2019, the Court of Justice of the European Union ruled on several cases regarding the Danish withholding tax regime with respect to dividends and interest paid by Danish companies to companies in other EU Member States with important consequences on the application of the IRD and PSD; whereas these cases confirm the importance of reliable beneficial ownership information and economic substance by the recipient of passive income;
Amendment 46 #
Motion for a resolution
Recital G
Recital G
G. whereas the cum-ex and cum-cum schemes both involve reclaims of dividend withholding tax, facilitated by the financial sector and other intermediairies, to which the beneficiaries were not entitled and are estimated to have imposed a total cost to taxpaypublic coffers of abroutnd EUR 55140 billion between 20010 and 20120 in the 11 Member States concernGermany, Netherlands, Spain, France, Italy, Belgium, Luxembourg, Denmark, Ireland and Austria; whereas the revelations consitute the largest ever tax fraud in the European Union; whereas public coffers are continuously losing taxpayer money as a result of these schemes which are still being actively used;
Amendment 52 #
Motion for a resolution
Recital G a (new)
Recital G a (new)
G a. whereas there is no EU wide system for relieving withholding tax at source or, for repaying it, also the 2017 EU’s Code of Conduct is not widely applied nor is the OECD’s Treaty Relief and Compliance Enhancement package24a; _________________ 24aOpening statement by Paul Gisby Accountancy Europe at the FISC subcommittee public hearing in the European Parliament on the 27th of October 2021.
Amendment 53 #
Motion for a resolution
Recital G b (new)
Recital G b (new)
G b. whereas the Commission has announced in July 2020 to propose a legislative initiative to introduce a common, standardised, EU-wide system for withholding tax relief at source, accompanied by an exchange of information and cooperation mechanism among tax administrations25a; whereas the Commission has recently published its inception impact assessment and a proposal is expected for the fourth quarter of 2022 26a; _________________ 25a https://ec.europa.eu/taxation_customs/syst em/files/2020- 07/2020_tax_package_tax_action_plan_e n.pdf 26ahttps://ec.europa.eu/info/law/better- regulation/have-your- say/initiatives/13031-Withholding-taxes- new-EU-system-to-avoid-double- taxation_en
Amendment 54 #
Motion for a resolution
Paragraph 1
Paragraph 1
1. NotDeplores that despite continuous efforts, the system of withholding taxes in the EU has remained largely fragmented, after being dismantled with the IRD and PSD, has remained largely fragmented in terms of rates and relief procedures, creating loopholes which could bare abused to shift profits and barriers to cross-border investments in the single market, encouraging aggressive tax competition between EU Member States and creating barriers to cross-border investments in the single market; deeply deplores the legislative inaction by policy makers at both EU and Member State level confronted with growing evidence of profit shifting, aggressive tax competition, and most in particular after the Cum-Ex revelations, over the past decades on this matter;
Amendment 64 #
Motion for a resolution
Paragraph 3
Paragraph 3
3. Welcomes the agreement reached by the G20/OECD Inclusive Framework on a two-pillar reform, including a global minimum effective tax rate; considers this an important step towards ending the practice of shifting profits to low-tax jurisdictions; regrets the fact that the scope is limited to multinational enterprises with a global consolidated turnover of at leastagreement on the carve-out, the de-minimis exclusion and the fact that the rate is limited to 15%; notes that the G20/OECD Inclusive Framework agreements allows to lower the established threshold of EUR 750 million;
Amendment 69 #
Motion for a resolution
Paragraph 4
Paragraph 4
4. Is pleased that 136 countries and jurisdictions have supported the G20/OECD Inclusive Framework agreement on a two-pillar reform; regrets the fact that one Member State is not part of the Inclusive Framework; deeply regrets the damaging role played by certain EU Member States during the negotiations, most in particular Ireland, Hungary, and Estonia; notes that these countries at first refused to join the agreement in July 2021;
Amendment 77 #
Motion for a resolution
Paragraph 5
Paragraph 5
5. Regrets the fact that base erosion and profit shifting are still ongoing and are facilitated by the tax regimes of certain Member Statelack of a common withholding tax on outbound payments to third countries and the lack of a minimum rate for intra-EU flows of dividends, royalties and interests; recalls that the Commission, in the context of the European Semester and the assessment of the National Recovery and Resilience Plans, found that more reforms are needed in order to address aggressive tax planning in six Member States, where the absence or limited application of withholding taxes on outbound payments are likely to be misused for aggressive tax planning and treaty shopping;
Amendment 86 #
Motion for a resolution
Paragraph 6
Paragraph 6
6. Calls on the Commission and the Member States to set upagree on a harmonised withholding tax framework that ensures that all dividend, interest and royalties payments flowing out of the EU are taxed at a minimum effective tax rate of at least 25%; welcomes in this respect the introduced conditional withholding tax in the Netherlands as a first step to limit profit shifting; notes that such a common withholding tax rates could constitute an EU own resource;
Amendment 94 #
Motion for a resolution
Paragraph 7
Paragraph 7
7. Recalls the proposal by 10 Member States to include an effective minimum tax rate for royalties and interest in the context of the IRD; deplore that negotiations have been blocked since 2012; urges the Council to swiftly resume and conclude the negotiations on the IRD and encourages the inclusion ofcalls on the Commission to include such a measure in the announced directive for the implementation of Pillar II;
Amendment 102 #
Motion for a resolution
Paragraph 8
Paragraph 8
8. Notes that the lack of an effective minimum tax rate on dividend payments to shareholders has triggered a race to the bottom in this field; calls for the adoption of an effective minimum tax rate for dividend payments to shareholders in the EU, thereby reducing harmful tax competition in this realm; urges the Commission to come forward with a revision of the PSD;
Amendment 113 #
Motion for a resolution
Paragraph 9
Paragraph 9
9. Recalls that in October 2018, an investigation disclosed that 11 Member States had lost up to EUR 55.2 billion in tax revenue as a result of cum-ex and cum- cum schemes; deeply deplores that in October 2021 the investigating readjusted the lost tax revenues to around 140 billion EUR for the period 2000-2020; is deeply concerned that these schemes continue to be exploited and the tax fraud continuous at the expense of European public coffers; is concerned to hear that other schemes might exist with similar damaging impact such as cum-fake; notes that the German Court of Justice in Karlsruhe has ruled in July 2021 that cum-ex schemes are illegal and therefore constitute tax fraud;
Amendment 119 #
Motion for a resolution
Paragraph 10
Paragraph 10
10. WelcomNotes the inquiry and final report by the European Securities and Markets Authority (ESMA) and the European Banking Authority (EBA) into cum-ex, cum-cum and withholding tax reclaim schemes, as requested by Parliament; calls on the Commission to propose measures to link tax reclaims to the underlying distribution of dividends, or to entrust a single entity with responsibility for collecting the withholding tax and issuing the relevant certificate; highlights in this framework the importance of accurate and complete beneficial ownership information;
Amendment 122 #
Motion for a resolution
Paragraph 11
Paragraph 11
11. Deeply deplores that both ESMA and EBA have failed in their supervisory powers and fail to acknowledge their failure; emphasises that the Cum-Ex revelations should not be limited to a mere tax issue but also a financial markets abuse matter; calls on the Commission to analyse whether the European Market Abuse Regulation has been violated; emphasises in addition that the role of intermediaries should be further investigated and calls on the Commission to develop appropriate measures to tackle the role of intermediaries in facilitating tax fraud, and avoidance; Calls on the Commission to enhance cooperation and mutual assistance between tax authorities, financial market supervisory authorities and, where appropriate, law enforcement bodies regarding the detection and prosecution of withholding tax reclaim schemes;
Amendment 128 #
Motion for a resolution
Paragraph 12
Paragraph 12
12. Notes that although Directive 2014/107/EU has facilitated the exchange of information, other obstacles to the detection of cum-ex and cum-cum schemes exist, including the timeliness of exchanges, the scope of the exchange of information on capital gains, and the insufficient spontaneous exchange of information; recalls the recommendations from its resolution of 16 September 2021 on the implementation of the EU requirements for exchange of tax information: progress, lessons learnt and obstacles to overcome;
Amendment 131 #
Motion for a resolution
Paragraph 13
Paragraph 13
13. Recalls that Directive (EU) 2018/822 introduced an obligation on intermediaries to report potentially harmful tax arrangements; calls on the Commission to evaluate to what extent these rules have contributed to revealing harmful tax arrangements such as cum-cum and cum- ex schemes and to what extent they have had a deterrent effect; calls on the Commission to extend DAC6 reporting requirements to cross-border arrangements for the management of assets of clients who are natural persons;
Amendment 139 #
Motion for a resolution
Paragraph 14
Paragraph 14
14. NotDeplores the Commission’s and Member States’ large inaction to address the problems of treaty shopping facilitated by EU Member States and the abusive schemes revealed by the Cum-Ex files; welcomes the Commission’s intention to put forward a proposal by the end of 2022 establishing a European withholding tax framework for dividend, interest or royalty payments, accompanied by a mechanism for the exchange of information and cooperation among tax administrations; urges the Commission for more ambition and to strive to also tackle divergences in withholding tax rates in the EU;
Amendment 148 #
Motion for a resolution
Paragraph 15
Paragraph 15
15. EncouraUrges the development ofCommission to come forward with a harmonised EU procedure for withholding tax refunds for all Member States, thereby addressing the concerns about regulatory discrepancies; notes that harmonisation can significantly simplify rules and diminish the need to rely on advanced technologies;
Amendment 159 #
Motion for a resolution
Paragraph 16
Paragraph 16
16. Notes that digitalising these procedures and improving cooperation between national tax administrations could reduce the administrative burden and uncertainty in cross-border investments; emphasises that technology is not a silver bullet to solve complexities caused by political inaction and a refusal to agree on common rules;
Amendment 168 #
Motion for a resolution
Paragraph 17
Paragraph 17
17. Takes note of the option to establish an EU system for relief at source; highlights that a move towards this type of system cannot be detrimental to the fight against tax abuse; stresses that, in all circumstances, compliance by the destination state with the agreement reached by the G20/OECD Inclusive Framework must be a prerequisite for relief at source; calls on the Commission to also consider relief at residence as a means to achieve efficient withholding tax procedures limiting possibilities for abuse;