Activities of Claude GRUFFAT related to 2021/2074(INI)
Shadow reports (1)
REPORT on the impact of national tax reforms on the EU economy
Amendments (42)
Amendment 6 #
Motion for a resolution
Citation 5 f (new)
Citation 5 f (new)
Amendment 16 #
Motion for a resolution
Citation 5 a (new)
Citation 5 a (new)
— having regard to the OECD Inclusive Framework agreementvon pillar 1 and pillar 2 as endorsed by the G20 Ministers of Finance on the 8thof October 2021,
Amendment 18 #
Motion for a resolution
Citation 5 b (new)
Citation 5 b (new)
— having regard to the OECD report of 19 May 2020 entitled ‘Tax and Fiscal Policy in Response to the Coronavirus Crisis: Strengthening Confidence and Resilience’,
Amendment 20 #
Motion for a resolution
Citation 5 c (new)
Citation 5 c (new)
— having regard to the IMF policy paper of 25 May2021 entitled ‘Taxing Multinationals in Europe’,
Amendment 21 #
Motion for a resolution
Citation 5 d (new)
Citation 5 d (new)
— having regard to its resolution of 15 January 2019 on gender equality and taxation policies in the EU,
Amendment 22 #
Motion for a resolution
Citation 5 e (new)
Citation 5 e (new)
— having regard to the Commission survey of 2020 entitled ‘Tax policies in the European Union’,
Amendment 23 #
Motion for a resolution
Citation 5 g (new)
Citation 5 g (new)
— having regard to the European Parliament resolution of 21 October 2021 entitled ‘Pandora Papers: implications for the efforts to combat money laundering, tax evasion and tax avoidance’,
Amendment 28 #
B. whereas although tax policy largely remains a Member State responsibility, the single market requires a minimuman Economic and Monetary Union requires a more appropriate framework to ensure cooperation and coordination in the field of taxation, particularly to achieve optimal results in preventing base erosion, dumping and tax competition and therefore require a degree of coordination or harmonisation in setting tax policy1 ; _________________ 1 As laid down in Articles 110-118 TFEU.
Amendment 37 #
Motion for a resolution
Recital C
Recital C
C. whereas tax policy fragmentation creates various obstacles for companies and citizenitizens and companies in the single market, including legal uncertainty, red tape, the risk of double taxation and difficulties claiming tax refunds; whereas these obstacles discourage cross-border economic activity in the single market ; whereas policy fragmentation alsoequally creates risks for tax authorities such as double non-taxation and arbitrage possibilities (such as tax planning) and aggressive tax avoidance practices); whereas policy fragmentations increases tax authorities’ cost of enforcement ;
Amendment 41 #
Motion for a resolution
Recital C a (new)
Recital C a (new)
C a. whereas ordinary citizens and entrepreneurs are particularly affected by the complexities of the tax system, taking into account their limited resources compared to those of multinational enterprises (MNEs);
Amendment 44 #
Motion for a resolution
Recital D
Recital D
D. whereas within the EU’s social market economy, adequate tax levels and simple and clear tax laws should not distort economic actors’ decision-making; whereas sound tax policies should support the creation of jobs and economic growth and improve the competitiveness of the EU and its Member Statesaim at being least distortive as possible; whereas holistic tax systems should fulfil four objectives including revenue raising, redistribution, repricing and representation leading to fair societies and sustainable and carbon-neutral economy;
Amendment 46 #
Motion for a resolution
Recital D a (new)
Recital D a (new)
D a. whereas the economic recovery and the challenges regarding climate crisis, the ecological transition, the digitization of the economy involve very profound changes and increase the need to mobilise more resources and re- evaluate the current taxation policies, in particular the many loopholes embedded in complex national taxation polices, so that this transition is fair;
Amendment 52 #
Motion for a resolution
Recital E
Recital E
E. whereas the overall level of taxation differs considerably between Member States, as demonstrated by the fact that the tax-to-GDP ratio varied between 22.1 % in Ireland and 46.1 % in Denmark in 20192 ; ;whereas on aggregate, the tax burdento GDP in the EU (40.1 %) is high even whener compared to other advanced economies (the Organisation for Economic Co-operation and Development (OECD) average wasof 34.3 % in 2018); whereas strong tax competition in the EU appears to have been a major driving force behind the steep decline in corporate income tax rates that has brought the average European corporate income tax rate below the average rate in OECD countries; _________________ 2Commission Annual Report on Taxation 2021, p. 24.
Amendment 55 #
Motion for a resolution
Recital E a (new)
Recital E a (new)
E a. whereas international tax competition leads to suboptimal global welfare outcomes because of inefficiently low tax rates as each country attempts to make its tax system more attractive than those of others2a;whereas competition for foreign direct investment and real economic activities should therefore focus less on taxation and more on true value drivers such as good infrastructure, high levels of education, available workforce, legal certainty, independent judiciary, innovation, research and development, development of SMEs, and quality healthcare for which tax revenues are needed; _________________ 2a IMFreport, Taxing Multinationals in Europe, 2021 ;
Amendment 69 #
Motion for a resolution
Paragraph 1
Paragraph 1
1. Recalls that Member States are free to decide on their own economic policies and in particular their own tax policies; recalls, however, that Member States must exercise this competence consistently with Union law within the boundaries of the EU treaties and insofar EU law is transposed and properly enforced; highlights, however, that tax differentials and excessive tax competition distort the international allocation of capital and production and the cross-border spillovers of other countries’ tax policies may limit de facto tax sovereignty;
Amendment 84 #
Motion for a resolution
Paragraph 2
Paragraph 2
2. Notes that the estimated tax compliance costs for large companies (MNEs) amount to about 2 % of taxes paid, while for small and medium-sized enterprises (SMEs) the estimate is about 30 % of taxes paid4 ; notes further that empirical evidence suggests that MNEs’ profits tend to be taxed less than profits of domestic peers, reflecting profit shifting from high- to low-tax affiliates ; _________________ 4 Commission Communication of 15 July 2020 on an action plan for fair and simple taxation supporting the recovery strategy, p. 6 (COM(2020)0312).
Amendment 91 #
Motion for a resolution
Paragraph 4
Paragraph 4
4. Notes that tax base harmonisation such as the common corporate tax base or the ‘Business in Europe: Framework for Income Taxation’ (BEFIT) could reduce the cost of tax compliance for SMEs that operate in more than one Member State; reiterates that taxing profits where the economic activities take place will allow governments to offer a level playing field for their SMEs, that struggle to cope with unfair competition from MNEs; highlights the need to tax corporations on the basis of a fair and effective formula for the allocation of taxing rights between countries;
Amendment 96 #
Motion for a resolution
Paragraph 4 a (new)
Paragraph 4 a (new)
4 a. Notes the idea of a step wise implementation of unitary taxation in the EU, as a first step the formula apportionment could be applied to above- normal profits only ; highlights that pillar 1 of the recent OECD/G20 agreement leads to a re-allocation of such excess profits to market jurisdictions; invites the Commission to reflect on the expansion of the OECD pillar 1 principles in the EU with lower thresholds, higher allocation and a more comprehensive formula including tangible assets and employment;
Amendment 98 #
Motion for a resolution
Paragraph 4 b (new)
Paragraph 4 b (new)
4 b. Commits that the FISC subcommittee in the European Parliament will develop, in dialogue with experts, national parliaments and citizens, guiding principles ahead of the BEFIT proposal by the European Commission in 2023;
Amendment 99 #
Motion for a resolution
Paragraph 5
Paragraph 5
5. Notes that many Member States as well as the EU have introduced dedicated regimes favouring SMEs such as special VAT rules in order to offset the higher effective tax rates and higher tax compliance costs for SMEs; stresses that such special treatment, while generally positive, could risk introducing further distortions and further increasing the overall complexity of the system; highlights also that special regimes such as lower corporate income tax rates push high-income earners to incorporate avoiding progressive personal income taxation; notes that the corporate sector now accounts for a greater proportion of the overall economy due to a race to the bottom in corporate tax rates and the shift from personal income taxation to corporate income taxation;
Amendment 109 #
Motion for a resolution
Paragraph 5 a (new)
Paragraph 5 a (new)
5 a. Observes that the common market in the EU, with the free movement of factors of production, and close economic relations with non-EU neighbours (including Norway, Switzerland, and the United Kingdom) has generated large trade, investment, and financial flows among European countries ; notes that this deep inter connectedness, without coordinated tax rules such as minimum rates or commonly defined tax bases, however, has raised the sensitivity of each country’s tax bases and rate to that of other countries, magnifying in particular corporate income tax spillovers;
Amendment 111 #
Motion for a resolution
Paragraph 6
Paragraph 6
6. Notes that the EU has developed coordination mechanisms such as peer review procedures within the Code of Conduct Group and country-specific recommendations in the context of the European Semester; points out that the Commission has recommended to six Member States that they curb aggressive tax planning as part of the 2020 country- specific recommendations; ; welcomes the Commission’s integration of the country- specific recommendations to the assessment of the national recovery and resilience plans; calls on the Commission to make the country-specific recommendation regarding aggressive tax planning a regular feature of the European Semester and to further expand beyond corporate income taxation;
Amendment 122 #
Motion for a resolution
Paragraph 7
Paragraph 7
7. Highlights that the ideal level for tax policy coordination is on the international stage through, amongst others, the G20/OECD; notes that EU tax proposals based on international agreements have historically been more likely to be adopted by the Council; due to the unanimity rule; highlights, however, that proposals by the European Commission and unilateral measures at Member State level constitute a crucial step towards finding a global solution in the absence of such global solution;
Amendment 128 #
Motion for a resolution
Paragraph 7 a (new)
Paragraph 7 a (new)
7 a. Recalls that all existing directives in tax matters had to go through unanimity procedure in Council leading to weaker rules; also recalls that many of these instruments have undergone revisions such as the Parent Subsidiary directive; recalls as well that the revision of the Interest and Royalty directive or the definitive VAT regime is still blocked in Council; observes that as a result these EU instruments have not prevented a large tax gap and an aggressive tax competition between Member States; therefore concludes that the difficulties encountered in Council to deal with taxation challenges demonstrates the need to move to qualified majority in tax matters;
Amendment 132 #
Motion for a resolution
Paragraph 7 b (new)
Paragraph 7 b (new)
7 b. Deplores that the procedure laid down in Article 116 of the Treaty on the Functioning of the European Union, under which Parliament and the Council act in accordance with the ordinary legislative procedure, inorder to act when harmful tax practices lead to market distortion within the Union, has never been used so far; believes that Article 116 TFEU can be used to set minimum standards and harmonize tax rules in the EU;
Amendment 138 #
Motion for a resolution
Paragraph 9
Paragraph 9
9. Notes that digitalisation and a heavy reliance on intangible assets that pose challenges to the current tax system warrant a high degree of policy coordination; deplores the fact that some Member States have pressed ahead with the introduction of national digital taxes despite ongoing negotiations at EU and OECD levels; stresses that these national measures should be phased out following the implementation of an effective international solution;
Amendment 145 #
Motion for a resolution
Paragraph 9 a (new)
Paragraph 9 a (new)
9 a. Observes the current distortions of the single market due to an increasing and unregulated tax competition in the field of personal income, capital and wealthtaxation; notes the ongoing competition in the EU for high net-worth individuals through preferential regimes such as expatriate and investment regimes; also notes the competition for pensioners and so-called ‘digital nomads’; furthermore notes the large differences among Member States in the tax treatment of capital gains, inheritances and gifts leading to easily exploitable loopholes for companies and individuals; calls on the Commission to fully integrate these observations in the broader reflection taking place in 2022 and concluding in a Tax Symposium on the ‘EU tax mix on the road to 2050’; calls for greater alignment and administrative cooperation of capital gains taxation in the EU;
Amendment 153 #
Motion for a resolution
Paragraph 10 a (new)
Paragraph 10 a (new)
10 a. Notes that to help this access to credit to small and medium companies, funds to guarantee the loans of these companies should be created to facilitate investments in the ecological transition. These funds can be provided by the EIB or by national public banks;
Amendment 156 #
Motion for a resolution
Paragraph 11
Paragraph 11
11. Notes that debt equity bias varies considerably between the Member States; welcomes the fact that some Member States have introduced allowances for corporate equity to address this issue; stresses that a common European approach would be preferable in order to avoid distortions in the single marketambitiously transposed the interest-limitation rules as included in the first anti-tax avoidance directive; stresses that limiting further or abolishing the deductibility of interest costs would be preferable to avoid aggressive tax planning by companies and reducing corporate debt rates;
Amendment 159 #
Motion for a resolution
Paragraph 12
Paragraph 12
12. Looks forward to the Commission’s proposal forNotes the Commission’s proposal for a debt equity bias reduction allowance5 ; urges the Commission to equally propose rules to further limit the deductibility of interest costs; is concerned by the possible losses of tax revenues in times of budget deficits and need for large-scale public investments with a debt equity bias reduction allowance5 ; _________________ 5Commission communication of 18 May 2021 on business taxation for the 21st century (COM(2021)0251).
Amendment 167 #
Motion for a resolution
Paragraph 13
Paragraph 13
13. Notes that the effective marginal tax rate (EMTR) is often a decisive factor for corporations making investment decisions; notes that there is considerable variation in the EMTR across Member States; invites the Commission to look into whether some Member States are distorting competition by artificially lowering their EMTR, e.g. through accelerated depreciation schedules or adjusting the tax deductibility of certain items; notes that the EMTR do not reflect the impact of aggressive tax planning or of tax rulings and special tax regimes;
Amendment 175 #
Motion for a resolution
Paragraph 14
Paragraph 14
14. Highlights that tax incentives for private research and development (e.g. via tax credits, enhanced allowances or adjusted depreciation schedules) can help to lift an economy’s overall spending towards research and development, which often comes with positive externalities; is concerned, however, that certain types of tax incentives such as patent box / intellectual property box regimes do little to increase research and development spending and may actually distort the single marketincited profit shifting and aggressive tax planning;
Amendment 179 #
Motion for a resolution
Paragraph 15
Paragraph 15
15. Stresses that further harmonisation regarding tax incentives for research and development spending may be warranted; notes that that this was part of the Commission’s initial common corporate tax base proposal; deplores the fact that the topic was not addressed in the recent communication on business taxation for the 21st century; notes that tax incentives should aim at attracting investments in the real economy and therefore be expenditure based instead of profit based;
Amendment 181 #
Motion for a resolution
Paragraph 15 a (new)
Paragraph 15 a (new)
15 a. Notes that an important part of budgetary capacity is channeled through tax incentives in the form of exemptions, deductions, credits, deferrals and reduced tax rates3a; calls on the Commission to provide an assessment of all ineffective tax incentives and subsidies in particular those harmful to the environment and leading to negative economic distortions; calls on the Commission to establish a screening framework for tax incentives in the EU and oblige member states to publish the fiscal costs of tax incentives; calls on Member States to perform annual, detailed and public cost-benefit analyses of each tax provision; _________________ 3aThe tax-expenditure-to-GDP ratio is on average 4.5 percentagepoints in the EU; https://www.cepweb.org/reforming-tax- expenditures/;IMF, ‘Tax Policy for InclusiveGrowth after the Pandemic’, 16 December 2020, https://www.imf.org/en/Publications/SPR OLLs/covid19-special-notes#fiscal
Amendment 191 #
Motion for a resolution
Paragraph 15 b (new)
Paragraph 15 b (new)
15 b. Recalls on the Commission and the Member States to carry out regular impact assessments of fiscal policies from a gender equality, geographic, and socio- economic perspective;
Amendment 207 #
Motion for a resolution
Paragraph 16 – point a (new)
Paragraph 16 – point a (new)
(a) Suggests that the EU Taxation scoreboard should assess Member States’ tax practices according to a common set of objective criteria, such criteria should at least include : (a) the existing criteria used by the code of conduct group on business taxation;
Amendment 208 #
Motion for a resolution
Paragraph 16 – point b (new)
Paragraph 16 – point b (new)
(b) the criteria used to list third country jurisdictions as part of the EU list of non-cooperative jurisdictions;
Amendment 209 #
Motion for a resolution
Paragraph 16 – point c (new)
Paragraph 16 – point c (new)
(c) the past and ongoing infringement procedures launched against Member States for lack of conformity or lack of implementation of European legislation on tax and money laundering matters;
Amendment 210 #
Motion for a resolution
Paragraph 16 – point d (new)
Paragraph 16 – point d (new)
(d) some criteria from the Commission’s 2016 scoreboard prepared for third countries (in the context of the establishment of the EU list of non- cooperative jurisdictions), including for examples criteria on financial activity (levels of financial services exports, total FDIs, statistics on foreign affiliates and specific financial income flows) or on stability factors (governance indicators, corruption levels);
Amendment 211 #
Motion for a resolution
Paragraph 16 – point e (new)
Paragraph 16 – point e (new)
(e) economic indicators used by the Commission in its study on aggressive tax planning in2017 including tax treaties, interests and royalties payments etc;
Amendment 212 #
Motion for a resolution
Paragraph 16 – point f (new)
Paragraph 16 – point f (new)
(f) an analysis of the tax mix per Member States;
Amendment 213 #
Motion for a resolution
Paragraph 16 – point g (new)
Paragraph 16 – point g (new)
(g) spillover analysis of Member States tax policies and tax mix;