Activities of José GUSMÃO related to 2020/2254(INL)
Shadow reports (1)
REPORT with recommendations to the Commission on fair and simple taxation supporting the recovery strategy (EP follow-up to the July Commission’s Action Plan and its 25 initiatives in the area of VAT, business and individual taxation)
Amendments (30)
Amendment 10 #
Motion for a resolution
Recital A
Recital A
A. whereas the unprecedented impact and magnitude of the COVID-19 crisis on the economy has led to a decrease in tax revenues and an increase in fiscal expenditures to protect society and the economy, and is leading to a sharp increase in government debt; whereas tax fraud and tax evasion undermines government revenues, as well as the sustainability of public finances and taxation systems; whereas it is paramount to keep taxes low to support the growth of the economythroughout European history, when facing crisis, some countries greatly modified their taxation system, for example France introduced an excess profit tax during World War I, which sometimes led to a long-term modification of their taxation system;
Amendment 16 #
Motion for a resolution
Recital B
Recital B
B. whereas a swift recovery requires a strong economic and fiscal policy response ensuring, inter alia: (i) an effective level playing field for businesses, reducing or eliminating tax benefits that unfairly create disadvantages to SMEs, including less red tape to promote both domestic trade and trade within the Single Market, supported by a simple and more predictable tax environment; (ii) securing tax revenues for Member States to finance the recovery and reduce debt to GDP and (iii) fair taxation of businesses and citizens, enhancing both trust in society and fair competition;
Amendment 18 #
Motion for a resolution
Recital C
Recital C
C. whereas the Commission’s Action Plan is part of a wider Union tax strategy in the area of VAT, business and individual taxation; whereas the Action Plan sets out a dual approach combining actions for combating tax fraud and tax evasion and simplifying steps to remove unnecessary obstacles and administrative burdens for taxpayercitizens and SMEs;
Amendment 35 #
Motion for a resolution
Recital G
Recital G
G. whereas increased transparency in the area of corporate taxation can improve tax collection and is also necessary to strengthen fair competitiveness in the single market, which will make the work of tax authorities more efficient; whereas the final agreement on the public country-by- country reporting is far from being enough as it will not provide disaggregated data for more than 80% of the countries in the world; whereas the use of technology and digitalisation focused on a more efficient use of the available data can support efficiency and transparency of tax authorities and reduce the costs of compliance and increase the trust of the public;
Amendment 38 #
Motion for a resolution
Paragraph 1
Paragraph 1
1. Welcomes the Commission's Action Plan and supports its thorough implementation; observes that the majority of the 25 actions are related to VAT, which is appropriate due to the high level of revenue losses in the area of VAT; supports the effort of reducing the VAT gap in order to prevent the possible need to increase the tax rates on consumption; considers however that an impact assessment should be carried out, before presenting concrete legislative proposals to better apprehend the potential effects on taxpayers and businesses; stresses, however, that the Commission’s Action Plan should have also a focus on corporate taxation and anti-money laundering mechanisms in alignment with the international momentum;
Amendment 44 #
Motion for a resolution
Paragraph 1 a (new)
Paragraph 1 a (new)
1 a. Underlines that regressive taxes such as VAT show an upward trend in the Union and represent 7,1% of GDP, whereas fairer taxes such as corporate taxes are decreasing and represent only 2,8% of GDP; stresses that this trend does not go in the right direction as the gap between those figures was one percentage point lower in 2006;
Amendment 49 #
Motion for a resolution
Paragraph 3
Paragraph 3
3. Welcomes the Commission's proposal to modernise, simplify and harmonise VAT requirements, using transaction-based 'real time' reporting and e-invoicing; notes that such reporting needs to be taxpayer-friendly while allowing tax administrations to have an overview of the various transactions in real-time, facilitating the prevention and detection of fraud and risky economic operators; considers that reporting requirements and tax forms should converge across the Member States; believes that the use of the data-mining tool Transaction Network Analysis (TNA) represents an available way to reduce tax fraud and promotes its further development and sharing of best practices among Member States; however, stresses that, according to a study requested by TAX 3 in 20181a, no data is collected regarding business activity in Member States that do not participate in it, and that each participating Member State is allowed to set a ‘white list’ of actors in respect of which the TNA will not be able to collect VIES and VOW data; _________________ 1a LAMENSCH M. and CECI E. (2018) VAT fraud - Economic impact, challenges and policy issues, in https://www.europarl.europa.eu/RegData/ etudes/STUD/2018/626076/IPOL_STU(20 18)626076_EN.pdf
Amendment 53 #
Motion for a resolution
Paragraph 4
Paragraph 4
4. Recalls that any tax measures, temporary or not, should foster and not hamper the competitiveness of European businesses; sStresses that the reporting requirements should not generate higher administrative costs for economic actors, notably for small and medium-sized enterprises (SMEs); notes that to effectively address lost tax revenues, better quality and possible higher quantities of data may be needed, but only data effectively used, and collected from taxpayers only once with utmost security, should be collectedcollected in a way that respects taxpayers security; notes that data should aim to simplify various obligations of taxpayers, while artificial intelligence (AI) and various softwares should be used to maximise the effectiveness of the use of data;
Amendment 67 #
5. Is of the opinion that better estimates of overall tax losses in the Union are essential for efficient proposals on ways to effectively reduce tax losses; calls on the Commission to launch a coordinated effort by the Member States to establish a joint system of collecting statistics on VAT ‘carousel fraud’; points out that such a system could build upon practices already used in some Member States;
Amendment 83 #
Motion for a resolution
Paragraph 7
Paragraph 7
7. Notes that the Union decision- making process is not promoting change, as tax policy is a national prerogative and subject to unanimity; regrets that the current situation sometimes leads to an uneven or inconsistent application of tax regulations; calls on the Commission and the Member States to ensure more harmonised and consistent tax rules and their implementation, to protect the functioning of the single market and to assure the principle of “taxing where profit is generated”;
Amendment 89 #
Motion for a resolution
Paragraph 8
Paragraph 8
8. Takes note of the existing limits on decision making in the Council and calls for exploring all legal options as provided in the Treaties on taxation especially in order to ensure functionality of the single market and preserve Union competitiveness in the global marketto fight harmful competition practices;
Amendment 104 #
Motion for a resolution
Paragraph 9 a (new)
Paragraph 9 a (new)
9 a. Stresses that economically relevant VAT fraud schemes are mainly driven by multinationals and wealthy individuals, through schemes such as Missing Trader Intra Community, the buying and selling of cars as they were second-hand, and air craft leasing; stresses that, according to Europol estimates, between EUR 40billion and EUR 60 billion of the annual VAT revenue losses of Member States are caused by organised crime groups, and 2 % of those groups are behind 80 % of MTIC fraud; considers that it is necessary to focus on these issues when fighting VAT fraud;
Amendment 113 #
Motion for a resolution
Paragraph 10 a (new)
Paragraph 10 a (new)
Amendment 118 #
Motion for a resolution
Paragraph 10 b (new)
Paragraph 10 b (new)
10 b. Stresses the importance of a swift exchange of information between Member States to combat tax fraud; welcomes, in this context, the proposal announced in the Commission’s communication of further developing Eurofisc;
Amendment 121 #
Motion for a resolution
Paragraph 10 c (new)
Paragraph 10 c (new)
10 c. Welcomes the start of operations by the European Public Prosecutor Office (EPPO) in June of 2021;
Amendment 123 #
Motion for a resolution
Paragraph 10 d (new)
Paragraph 10 d (new)
10 d. Calls on Member States to facilitate the exchange of information with judicial and law enforcement authorities such as Europol and OLAF, as recommended by the Court of Auditors;
Amendment 124 #
Motion for a resolution
Paragraph 10 e (new)
Paragraph 10 e (new)
10 e. Asks for the Commission to relaunch the discussion on a definitive VAT regime; stresses however that VAT fraud typologies are multifaceted, evolving and concern many economic sectors, possibly changing to adapt to a new legal framework; a study requested by TAX 3 in 20183a stresses that “A new type of ‘missing trader’ is therefore likely to arise under the proposed ‘definitive system' (the seller becoming the missing trader in this case)”; _________________ 3aLAMENSCH M. and CECI E. (2018) VAT fraud - Economic impact, challenges and policy issues, in https://www.europarl.europa.eu/RegData/ etudes/STUD/2018/626076/IPOL_STU(20 18)626076_EN.pdf
Amendment 129 #
Motion for a resolution
Paragraph 11
Paragraph 11
11. Highlights that the current global tax environment is outdated, and can only be fully addressed on a global level; considers that athe multilateral agreement negotiated OECD/G20 Inclusive Framework on BEPS iwas a unique opportunity to make international tax architecture more consistent with the development of the economy by further addressing the distortions of fair competition in the market, which was accentuated during the COVID-19 crisis and highlighted problems related to the taxing of large multinational enterprises (MNEs);
Amendment 130 #
Motion for a resolution
Paragraph 11 a (new)
Paragraph 11 a (new)
11 a. Stresses, however, the significant loopholes that undermine the potential power of this agreement, more specifically: the carve-outs translating in a less than 15% effective minimum corporate tax rate and the fact that taxing rights are allocated to the jurisdictions where the headquarters are located, which does not respect the principle of taxing the economic activity where it happens;
Amendment 131 #
Motion for a resolution
Paragraph 11 b (new)
Paragraph 11 b (new)
11 b. Calls on the Commission to pass the international agreement into Union law and to be more ambitious, by implementing a 25% minimum effective corporate tax rate;
Amendment 134 #
Motion for a resolution
Paragraph 12
Paragraph 12
12. Welcomes the efforts of the Commission to address the problem at least partially by introducing various initiatives, but; stresses the high importance of the Union inin particular the proposal on the fight against abusive use of shell companies; recalls that recent research by the IMF shows that two Member States (Luxembourg and the Netherlands) host nearly half of the globe’s phantom Foreign Direct Investment (FDI) through empty corporate shells with zero or few employees in the host countributing to the success of global negotiations towards the ongoing necessary reforms;y4a; calls for the definition of substance requirements to assess legal entities and to further banning them if those requirements are not met; _________________ 4aDamgaard, J., Elkjaer, T. and Johannesen, N. (2019). What Is Real and What Is Not in the Global FDI Network?. IMF Working Paper No. 19/274. The authors find that “phantom investment into corporate shells with no substance and no real links to the local economy may account for almost 40 percent of global FDI”, and that some of countries benefiting the most from such harmful tax practices include Luxembourg and the Netherlands, as well as Ireland, Cyprus, Malta and Hungary (all of which are EU Member States).
Amendment 146 #
Motion for a resolution
Paragraph 14
Paragraph 14
14. Welcomes the two-pillar agreement reached at the G7/G20 levels on the allocation of taxing rights and the application of a minimum effective tax rate of at least 15% on the global profits of MNEs; notes the need forregrets however the low level of the rate agreed, given that it had originally been set at 21%; stresses that the Union needs to undertake an effective implementation; calls on the Commission to make the necessary legislative proposals to implement the agreement into Union law as quickly as possible after the finalisation of the technical work on the OECD approach;
Amendment 152 #
Motion for a resolution
Paragraph 14 a (new)
Paragraph 14 a (new)
14 a. Calls on the Union to implement a temporary excess profit tax, to tax multinational enterprises which benefited from the crisis to increase their profits;
Amendment 153 #
Motion for a resolution
Paragraph 14 b (new)
Paragraph 14 b (new)
14 b. Calls on States to introduce and collect the tax deficit of multinationals: the difference between what a corporation pays in taxes globally and what this corporation would have to pay if all its profits were subject to a minimum tax rate in each of the countries where it operates; underlines that such a solution could encourage other States to follow the move and progressively lead to a global solution;
Amendment 154 #
Motion for a resolution
Paragraph 14 c (new)
Paragraph 14 c (new)
14 c. Calls on the Union to implement a progressive taxation on the wealth of the richest households;
Amendment 155 #
Motion for a resolution
Paragraph 15
Paragraph 15
15. Recalls that future Union policy options and political choices in the area of business taxation should be based on tax fairness, efficiency and transparency, while also taking into account the need to strengthen Member States tax revenues, given the decisive role of the governments in fostering a sustainable economic recovery from the pandemic; in this sense, stresses that these policy choices should leading to fairly shared taxes for all types of multinational companies, while reducing costs of compliance for taxpayers, specially low-income earners and SMEs, as well as removing sources of business distortions in the Union single market, trade and investments;
Amendment 168 #
Motion for a resolution
Paragraph 17
Paragraph 17
17. Considers, however, that the BEFIT initiative should be supported by the political process inRegrets the fact that previous CCTB and CCCTB proposals were not approved in the Council; looks forward to the details on the BEFIT initiative; notes that, in order to building political support for change and that, the initiative should be accompanied by a thorough impact assessment to shape future proposals, which should contribute to reaching a consensus between Member States;
Amendment 170 #
Motion for a resolution
Paragraph 17 a (new)
Paragraph 17 a (new)
17 a. Welcomes the latest advances on the pCBCR, stressing the importance of transparent and standardised data on corporate activity, allowing for better scrutiny; regrets, however, that, in order to reach a compromise, the Council restricted the obligation for companies to publicly report information only for their operations in Member States and the countries listed in the Union’s list of non- cooperative jurisdictions, ruling out third countries that in fact serve as tax havens but are not yet listed; include in the text a “corporate-get-out-clause” allowing a reporting exemption for “commercially sensitive information” which is only to be applied to companies with an annual consolidated turnover above EUR 750 million, which excludes 85 - 90 per cent of multinationals; calls for further development by the European Commission in order to advance with fully disaggregated data;
Amendment 174 #
Motion for a resolution
Paragraph 18
Paragraph 18
18. Considers that the new corporate tax agenda should include a mechanism to address the debt-equity bias through an incentive system, helping to support the resilience of companies in adverse economic circumstances in the futureRecognises as a problem the debt- equity bias in the treatment of tax benefits, creating room for multinationals that engage in harmful tax practices via intra- group operations; considers that the best option to tackle it should be the limitation of interest deductions, in line with the legislative spirit already introduce by ATAD in Article 4;
Amendment 178 #
Motion for a resolution
Paragraph 18 a (new)
Paragraph 18 a (new)
18 a. Calls on the Commission to carry out a more complete impact assessment on the DEBRA initiative, specifically showing estimates of tax revenue losses, comparing the scenario of limiting interest deduction or implementing an Allowance for Corporate Equity (ACE);