2020/2258(INI) Reforming the EU policy on harmful tax practices (including the reform of the Code of Conduct Group)
Lead committee dossier:
Progress: Procedure completed
| Role | Committee | Rapporteur | Shadows |
|---|---|---|---|
| Lead | ECON |
LALUCQ Aurore ( S&D)
|
DORFMANN Herbert ( EPP),
BOYER Gilles ( Renew),
URTASUN Ernest ( Verts/ALE),
BECK Gunnar ( ID),
JURZYCA Eugen ( ECR),
GUSMÃO José ( GUE/NGL)
|
Lead committee dossier:
Legal Basis:
RoP 54
Legal Basis:
RoP 54Subjects
Events
2022/02/02
EC - Commission response to text adopted in plenary
Documents
2021/10/07
EP - Results of vote in Parliament
Documents
2021/10/07
EP - Decision by Parliament
Details
The European Parliament adopted by 506 votes to 81, with 99 abstentions, a resolution on reforming the EU policy on harmful tax practices (including the reform of the Code of Conduct Group).
Combating tax evasion
Anti-tax avoidance policies have led to a decline in preferential tax regimes worldwide, in particular in the EU. However, new forms of harmful tax practices have emerged , notably through the transformation of preferential regimes into aggressive general regimes. Some studies show that the effective tax level of large multinationals is lower than that of domestic SMEs.
The Council's Code of Conduct Group on Business Taxation has been effective in discouraging preferential tax regimes. However, it has not succeeded in eradicating unfair tax arrangements granted by some Member States to large companies, such as harmful advance pricing agreements (tax rulings), and the resulting unfair competitive advantages.
Current EU measures to combat harmful tax practices
Members stressed that the proliferation of tax scandals over the last decade (Lux Leaks, Panama Papers, Paradise Papers, etc.) involving multinationals has revealed the scale and seriousness of harmful tax practices and the urgency of finding definitive solutions to address them.
Tax evasion and tax avoidance result in an unacceptable loss of important revenues for Member States, which are currently needed to cope with the devastating consequences of the pandemic. According to OECD estimates, base erosion and profit shifting (BEPS) costs 4-10% of global corporate tax revenues, or EUR 84-202 billion per year.
Parliament welcomed the significant actions taken at EU and international level to strengthen the principles of tax transparency, fight harmful tax competition, and ensure that measures against harmful tax practices are respected.
While tax competition between countries is not in itself problematic, Members consider that common principles should be applied to the extent to which countries can use their tax systems to attract business and profits . However, the nature and forms of tax competition have changed considerably over the last two decades and the Code of Conduct has not evolved to meet the new challenges.
Recommendations for future EU work on harmful tax practices
Parliament welcomed the proposed Pillar II reform of the OECD/G20 Inclusive Framework on BEPS (Inclusive Framework), which aims to address remaining BEPS challenges and to set out rules giving jurisdictions a right to tax back where other jurisdictions have not exercised their primary taxing rights or the payment is otherwise subject to low levels of effective taxation.
Members noted the new momentum in the OECD/G20 Inclusive Framework negotiations created by the US administration’s recent proposals, as well as the recent G7 agreement, which could facilitate a deal on Pillar II by mid-2021, gathering more than 130 countries. They share the G7’s commitment to a global minimum tax of at least 15 % on a country-by-country basis as a basis for further negotiations.
Parliament called for the adoption of a definition of 'minimum level of economic substance' compatible with the OECD global standard, preferably based on a formulaic approach, which would evolve progressively as reported income increases. It proposed that such a criterion could be used to assess whether a tax regime is potentially harmful.
The Commission is asked to develop guidelines on how to design fair and transparent tax incentives that are less likely to distort the single market, ensure fair competition and promote job creation.
Members welcomed the Commission's recognition that consideration should be given to introducing a global minimum tax standard in the Code of Conduct in the future, regardless of whether a global consensus is reached, to ensure that all companies pay a fair tax when making profits in the single market.
Reform of the Code of Conduct on business taxation
Members believe that the current criteria of the Code of Conduct defining harmful tax practices are partly outdated as they focus on preferential regimes. The effectiveness of the Code of Conduct should therefore be improved in the light of recent tax scandals and the current challenges of globalisation, digitalisation and the growing importance of intangible assets.
Deploring the non-binding nature of the Code of Conduct, Members called for a revision of the criteria, governance and scope of the Code of Conduct by means of a legally binding instrument based on the current intergovernmental arrangements and including a more efficient decision-making procedure. This review should be carried out through a democratic, transparent and accountable process and involve an expert group composed of experts from civil society, the Commission and the Parliament.
According to the resolution, the reform of the Code of Conduct criteria should include, first and foremost, an effective tax rate criterion in line with the internationally agreed minimum effective tax rate under Pillar 2 of the OECD/G20 inclusive framework on BEPS, as well as robust and progressive economic substance requirements while allowing for fair competition.
Members called on the Commission and Member States to consider developing a ‘ Framework on Aggressive Tax Arrangements and Low Rates ’ (FATAL) along the following lines, and which would replace the current Code of Conduct.
Documents
2021/10/06
EP - Debate in Parliament
Documents
2021/07/21
EP - Committee report tabled for plenary
Details
The Committee on Economic and Monetary Affairs adopted an own-initiative report by Aurore Lalucq (S&D, FR) on reforming the EU policy on harmful tax practices (including the reform of the Code of Conduct Group).
The conservative estimates by the OECD on Base Erosion and Profit Shifting (BEPS) which costs around 4-10 % of global corporate income tax revenues , or EUR 84-202 billion annually. Parliament’s estimates of corporate tax avoidance range from EUR 160 to 190 billion when both BEPS and other tax regimes are considered.
The proliferation of tax scandals in the last decade (Lux Leaks, Panama Papers, Paradise Papers, etc.) involving multinational corporations and net worth individuals has revealed the extent and seriousness of these phenomena and the urgency of finding definitive solutions to overcome them. The report underlined that tax fraud and tax evasion result in an unacceptable loss of important revenues for Member States, which are currently needed to cope with the devastating consequences of the pandemic.
Current EU action to tackle harmful tax practices
The report welcomed the important work being done at EU and international level to strengthen the principles of tax transparency, the fight against harmful tax competition and to ensure that measures to combat harmful tax practices are respected. Members welcomed the inter-institutional agreement reached on the directive amending Directive 2013/34/EU as regards the disclosure of information by certain businesses and branches regarding profits tax (country-by-country returns). They hope that the Council will quickly adopt its position at first reading.
Members welcomed the fact that, since 1997, the Code of Conduct for business taxation is the EU's main instrument for preventing harmful tax competition. A Forum on Harmful Tax Practices was also established within the OECD in 1998 to monitor and review tax practices, with a particular focus on the characteristics of preferential tax regimes.
The European Commission recognised that the nature and forms of tax competition have changed considerably over the last two decades and that the Code of Conduct has not evolved to meet the new challenges.
Recommendations for future EU work on harmful tax practices
The OECD has recently resumed negotiations on BEPS 2.0, which is structured around two pillars.
Pillar I aims to adapt the international income tax system to the new business models that have emerged in the digital economy by changing the nexus and profit allocation rules applicable to corporate profits.
Pillar II focuses on a global minimum tax to address unresolved BEPS issues. It aims to ensure that multinational companies pay a minimum amount of tax regardless of where they are headquartered or in which country they operate.
Members noted the new momentum in the OECD/G20 Inclusive Framework negotiations created by the US administration’s recent proposals, as well as the recent G7 agreement, which could facilitate a deal on Pillar II by mid-2021, gathering more than 130 countries. They share the G7’s commitment to a global minimum tax of at least 15 % on a country-by-country basis as a basis for further negotiations.
The report pointed out that the Commission is committed to proposing a similar solution to Pillar II on minimum effective taxation, whether or not an agreement is reached at the OECD inclusive framework level. In this context, Members welcomed the Commission's recognition that consideration should be given to introducing a minimum global taxation standard in the Code of Conduct in the future, regardless of whether a global consensus is reached, to ensure that all businesses pay their fair tax when making profits in the single market. They stressed the need to tax multinational companies based on a fair and effective formula for the allocation of taxing rights between Member States.
Reform of the Code of Conduct on business taxation
The report recognised that the peer review of national tax regimes conducted within the framework of the Code of Conduct has had an impact on reducing harmful tax competition and has led to a consequential decrease in preferential tax regimes within the EU. Nevertheless, it called on the Council to continue reforming the scope of the current mandate .
Deploring the non-binding nature of the Code of Conduct, Members called for a revision of the criteria, governance and scope of the Code of Conduct by means of a legally binding instrument based on the current intergovernmental arrangements and including a more efficient decision-making procedure . This review should be carried out through a democratic, transparent and accountable process and involve an expert group composed of experts from civil society, the Commission and the Parliament.
According to the report, the reform of the Code of Conduct criteria should include, first and foremost, an effective tax rate criterion in line with the internationally agreed minimum effective tax rate under Pillar 2 of the OECD/G20 inclusive framework on BEPS, as well as robust and progressive economic substance requirements while allowing for fair competition.
Members called on the Commission and Member States to consider developing a ‘ Framework on Aggressive Tax Arrangements and Low Rates ’ (FATAL) along the following lines, and which would replace the current CoC.
Documents
2021/07/13
EP - Vote in committee
2021/06/02
EP - Amendments tabled in committee
Documents
2021/04/27
EP - Committee draft report
Documents
2020/12/17
EP - Committee referral announced in Parliament
2020/10/28
EP - LALUCQ Aurore (S&D) appointed as rapporteur in ECON
Documents
- Commission response to text adopted in plenary: SP(2021)735
- Results of vote in Parliament: Results of vote in Parliament
- Decision by Parliament: T9-0416/2021
- Debate in Parliament: Debate in Parliament
- Committee report tabled for plenary: A9-0245/2021
- Amendments tabled in committee: PE693.613
- Committee draft report: PE662.095
- Committee draft report: PE662.095
- Amendments tabled in committee: PE693.613
- Commission response to text adopted in plenary: SP(2021)735
Activities
- Dimitrios PAPADIMOULIS
- Paul TANG
Plenary Speeches (1)
- Pedro MARQUES
Plenary Speeches (1)
- Gunnar BECK
Plenary Speeches (1)
- José GUSMÃO
Plenary Speeches (1)
- Eugen JURZYCA
Plenary Speeches (1)
- Andżelika Anna MOŻDŻANOWSKA
Plenary Speeches (1)
- Hélène LAPORTE
Plenary Speeches (1)
- Marek BELKA
Plenary Speeches (1)
- Antoni COMÍN I OLIVERES
Plenary Speeches (1)
Votes
Réforme de la politique de l’Union en matière de pratiques fiscales dommageables (y compris la réforme du groupe «Code de conduite») - Reforming the EU policy on harmful tax practices (including the reform of the Code of Conduct Group) - Reform der EU-Politik im Bereich schädliche Steuerpraktiken (einschließlich der Reform der Gruppe „Verhaltenskodex“) - A9-0245/2021 - Aurore Lalucq - § 8 - Am 1 #
2021/10/06 Outcome: +: 628, 0: 38, -: 18
PPE
The Left
NIA9-0245/2021 - Aurore Lalucq - § 26 #
2021/10/06 Outcome: +: 331, -: 289, 0: 62
Réforme de la politique de l’Union en matière de pratiques fiscales dommageables (y compris la réforme du groupe «Code de conduite») - Reforming the EU policy on harmful tax practices (including the reform of the Code of Conduct Group) - Reform der EU-Politik im Bereich schädliche Steuerpraktiken (einschließlich der Reform der Gruppe „Verhaltenskodex“) - A9-0245/2021 - Aurore Lalucq - Proposition de résolution (ensemble du texte) #
2021/10/07 Outcome: +: 506, 0: 99, -: 81
| Amendments | Dossier |
| 224 |
2020/2258(INI)
2021/06/02
ECON
224 amendments...
Amendment 1 #
Motion for a resolution Citation 3 Amendment 10 #
Motion for a resolution Recital A A. whereas harmful tax practices (HTP) refer to measures put in place by States to compete with other States via preferential tax regimes
Amendment 100 #
Motion for a resolution Paragraph 6 6. Welcomes the fact that the proposal put forward by the US Administration for ‘The Made in America Tax Plan’ could facilitate a deal on Pillar II by mid-2021; encourages Member States to reach a common European approach towards the implementation of the final agreement at the OECD level; regrets the negative reaction of some key European decision- makers;
Amendment 101 #
Motion for a resolution Paragraph 6 a (new) Amendment 102 #
Motion for a resolution Paragraph 6 a (new) 6 a. Welcomes the Commission’s Communication on Business Taxation for the 21st century; notes the importance of developing a single corporate taxation framework for the EU that does not enable base erosion and profit shifting; highlights that reducing the friction of cross-border economic activity and ensuring a level playing field improves the conditions for businesses, in particular SMEs, to thrive in the single market; notes that failing to fix the dramatic loopholes in corporate taxation can lead to a scenario where national defensive measures proliferate, thus negatively impacting economic activity within the internal market;
Amendment 103 #
Motion for a resolution Paragraph 6 a (new) 6 a. Highlights that other solutions should be implemented to avoid tax dodging of multinational companies in all sectors; 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 solution could encourage other States to follow the move and progressively lead to a global solution;
Amendment 104 #
Motion for a resolution Paragraph 6 b (new) 6 b. Points out that all Member States and the European Union must review their standards according to the OECD agreement and the Commission’s previously mentioned communication; Stresses that, even if both initiatives are not fruitful, said standards should be updated, notably to include a minimum effective level of corporate taxation;
Amendment 105 #
Motion for a resolution Paragraph 6 c (new) 6 c. Highlights that taxes on capital gains and wealth will keep being subject to a downwards pressure as long as concerns of base erosion remain; encourages Member States to engage in further cooperation in the field of taxation in order to tackle these and other challenges;
Amendment 106 #
Motion for a resolution Paragraph 7 7. Calls for the current scope of the CoC to be progressively updated in order to look into the general characteristics of a tax system to determine whether they
Amendment 107 #
Motion for a resolution Paragraph 7 7. Calls for the
Amendment 108 #
Motion for a resolution Paragraph 7 7. Calls for the current scope of the CoC to be
Amendment 109 #
Motion for a resolution Paragraph 7 7. Calls for the current scope of the CoC to be progressively updated in order to look beyond the preferential nature of tax regime and instead into the general characteristics of a tax system to determine whether they have harmful effects; notes that this is already partially done by the CoC Group and in the framework of the EU listing process, notably for Notional Interest Deduction regimes and the Foreign Resource Income Exemption Regimes;
Amendment 11 #
Motion for a resolution Recital A a (new) Aa. whereas practices which are confiscatory in nature, preventing the growth of private initiative and the enrichment of citizens through state tax abuses, are also forms of HTP;
Amendment 110 #
Motion for a resolution Paragraph 7 7. Calls for the current scope of the CoC to be progressively updated in order to look into the general characteristics of a tax system to determine whether they have harmful effects; in this regard, calls upon the Council to follow-up on the July 2020 Commission Communication “Tax Good Governance in the EU and beyond” which advocates for a reform of the Code of Conduct to ensure fair taxation within the EU;
Amendment 111 #
Motion for a resolution Paragraph 7 7. Calls for the current scope of the CoC to be progressively updated in order to look into the general characteristics of a tax system to determine whether they have harmful effects. It calls for the inclusion of economic criteria in the assessment of harmful tax regimes, in particular to consider whether FDI and passive income are disproportionate compared to the country GDP. Highlights a general tendency of some sectors, such as real estate investments, to be more prone to potentially harmful tax exemptions;
Amendment 112 #
Motion for a resolution Paragraph 8 8. Calls for the adoption of a definition of ‘minimum level of economic substance’, preferably based on a formulaic approach, and which would evolve progressively as reported income increases, which could be used to assess whether a tax regime is potentially harmful; highlights the economic substance requirement already included in the EU list’s ‘Fair Taxation’ criterion; raises the possibility, following the same line of argument, of assessing and defining an appropriate maximum level of taxation above which would be considered confiscatory taxation that harms private initiative and, therefore, public revenue;
Amendment 113 #
Motion for a resolution Paragraph 8 8. Calls for the adoption of a definition of ‘minimum level of economic substance’
Amendment 114 #
Motion for a resolution Paragraph 8 8. Calls for the adoption of a definition of ‘minimum level of economic substance’
Amendment 115 #
Motion for a resolution Paragraph 8 8.
Amendment 116 #
Motion for a resolution Paragraph 8 8. Calls for the adoption of a definition of ‘minimum level of economic substance’, preferably based on a formulaic approach, and which would evolve progressively as reported income increases, which could be used to assess whether a tax regime is potentially harmful; highlights the economic substance requirement already included in the EU list’s ‘Fair Taxation’ criterion; welcomes, in this regards, the future proposal on ‘Fighting the use of shell entities and arrangements for tax purposes’ as announced by the Commission in its inception roadmap of 20th of May 2021; highlights the Commission considers a possible new substance requirements and indicators of “real economic activity” for the purpose of taxation rules;
Amendment 117 #
Motion for a resolution Paragraph 8 8. Calls for the adoption of a definition of ‘minimum level of economic substance’,
Amendment 118 #
Motion for a resolution Paragraph 8 8. Calls for the adoption of a definition of ‘minimum level of economic substance’, preferably based on a formulaic approach, and which would evolve progressively as reported income increases, which could be used to assess whether a tax regime is potentially harmful; highlights the economic substance
Amendment 119 #
Motion for a resolution Paragraph 8 8. Calls for the adoption of a definition of ‘minimum level of economic substance’, preferably based on a formulaic approach, and which would evolve progressively as reported income increases, which could be used to assess whether a tax regime is potentially harmful; highlights the economic substance requirement already included in the EU list’s ‘Fair Taxation’ criterion; recalls the current minimum requirement on economic substance as existing in the EU list allows notorious tax havens to be delisted after de minimis reforms;
Amendment 12 #
Motion for a resolution Recital A a (new) A a. whereas an estimated EUR 36-37 billion of corporate income tax (CIT) revenue are lost due to tax avoidance per year in the EU 1a _________________ 1ahttps://op.europa.eu/en/publication- detail/-/publication/db46de2a-b785-11eb- 8aca-01aa75ed71a1/language-en
Amendment 120 #
Motion for a resolution Paragraph 8 a (new) 8a. Calls for a comparative evaluation to be carried out between EU Member States and between regions with fiscal powers in order to assess the levels of collection, taking into account the tax burden in each of those territories;
Amendment 121 #
Motion for a resolution Paragraph 9 Amendment 122 #
Motion for a resolution Paragraph 9 9. Calls on the Commission to produce guidelines on how to design tax incentives with fewer risks of distorting the Single Market, notably by looking at the type(profit based or costs based), the temporal nature (temporary or permanent),the geographical limitation (economic zones) and the intensity (full or partial exemptions) of such incentives;
Amendment 123 #
Motion for a resolution Paragraph 9 9. Calls on the Commission to
Amendment 124 #
Motion for a resolution Paragraph 9 9. Calls on the Commission to produce guidelines on how to design tax incentives with fewer risks of distorting the Single Market, in order to promote business and job creation;
Amendment 125 #
Motion for a resolution Paragraph 9 9. Calls on the Commission to produce guidelines on how to design tax
Amendment 126 #
Motion for a resolution Paragraph 9 a (new) 9 a. Recalls that the procedure laid down in Article 116 of the Treaty on the Functioning of the European Union (TFEU), under which Parliament and the Council act in accordance with the ordinary legislative procedure, should be applied when harmful tax practices lead to market distortion within the Union;
Amendment 127 #
Motion for a resolution Paragraph 10 Amendment 128 #
Motion for a resolution Paragraph 10 10. Notes that the Commission recognises that a future minimum global taxation standard would have to be integrated into the EU actions on fair tax competition, and that if no consensus is found at global level on such a standard, it should nonetheless be included in the CoC29 ; calls on the Commission to already assess the legislative proposals that will be necessary to implement Pillar II at Union level, including a revision of ATAD and of the Interest and Royalties Directive, and the reform of the CoC and of the criteria in the EU listing of non-cooperative jurisdictions; considers that the definition of a minimum effective level of tax would not prevent Member States to propose legitimate tax incentives at a lower rate, as long as the income qualifying for such regimes relies on minimum economic substance requirements; understands that, overall, the national average effective rate of a large undertaking should not fall below the minimum rate, following the logic of the current Pillar II proposal; _________________ 29 COM(2020)0313.
Amendment 129 #
Motion for a resolution Paragraph 10 10. Notes that the Commission recognises that a future minimum global taxation standard would have to be integrated into the EU actions on fair tax competition, and that if no consensus is found at global level on such a standard, it should nonetheless be included in the CoC
Amendment 13 #
Motion for a resolution Recital A b (new) A b. 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 others 1a; 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, and quality healthcare for which tax revenues are needed; _________________ 1aIMF report, Taxing Multinationals in Europe, 2021: https://www.imf.org/en/Publications/Depa rtmental-Papers-Policy- Papers/Issues/2021/05/25/Taxing- Multinationals-in-Europe-50129
Amendment 130 #
Motion for a resolution Paragraph 10 10.
Amendment 131 #
Motion for a resolution Paragraph 10 10. Notes that the Commission recognises that a future minimum global taxation standard would have to be integrated into the EU actions on fair tax competition, and that if no consensus is found at global level on such a standard, it should nonetheless be included in the CoC29 ; calls on the Commission to already assess the legislative proposals that will be necessary to implement Pillar II at Union level, including a revision of ATAD and of the Interest and Royalties Directive, and the reform of the CoC and of the criteria in the EU listing of non-cooperative jurisdictions; calls,in this regard, on the Commission to guarantee that the implementing rules on a minimum effective rate will be designed without excessive compliance costs, especially for SMEs; _________________ 29 COM(2020)0313.
Amendment 132 #
Motion for a resolution Paragraph 10 10.
Amendment 133 #
Motion for a resolution Paragraph 10 10.
Amendment 134 #
Motion for a resolution Paragraph 10 10. Notes that the Commission recognises that a future minimum global taxation standard would have to be integrated into the EU actions on fair tax competition, and that if no consensus is found at global level on such a standard, it should nonetheless be included in the CoC29
Amendment 135 #
Motion for a resolution Paragraph 10 10. Notes that the Commission recognises that a future minimum global taxation standard would have to be integrated into the EU actions on fair tax competition, and that if no consensus is found at global level on such a standard, it should nonetheless be
Amendment 136 #
Motion for a resolution Paragraph 10 a (new) 10 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 wealth taxation; 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;
Amendment 137 #
Motion for a resolution Paragraph 10 a (new) 10 a. Takes note of the Commission‘s Communication on Business Taxation for the 21st Century; takes note of this new attempt to provide for a fair and sustainable business environment and EU tax system by introducing a new framework for business taxation (BEFIT) to replace the proposal fora Common Consolidated Corporate Tax Base (the CCCTB); is concerned by the lack of a clear strategy to ensure the new framework for business taxation in Europe will achieve support from the Member States;
Amendment 138 #
Motion for a resolution Paragraph 10 a (new) 10 a. Notes that many of the cases in the recent so-called OpenLux scandal was to a high extent made possible by the lack of a national withholding tax on outbound interest and royalties; regrets that the Interest and Royalties Directive has been blocked in Council since 2012; calls on the Council and Presidency to reopen negotiations in this regard;
Amendment 139 #
Motion for a resolution Paragraph 10 a (new) 10 a. Reminds that according to study commissioned by the European Economic and Social Committee29a, reductions in corporate tax rates can lead to an increase in revenues and raise annual economic growth; _________________ 29a https://www.eesc.europa.eu/sites/default/fi les/files/qe-03-19-343-en-n.pdf
Amendment 14 #
Motion for a resolution Recital B B. whereas anti-tax avoidance policies have led to a decline in preferential regimes all around the world, particularly in the Union; whereas new forms of HTP have emerged
Amendment 140 #
Motion for a resolution Paragraph 10 b (new) 10 b. Stresses that according to study commissioned by the European Economic and Social Committee30a, as corporate tax rates have converged to below 20 percent, more investments have become economically viable, which has also resulted in more jobs and considerable tax revenues from wages and consumption; _________________ 30a https://www.eesc.europa.eu/sites/default/fi les/files/qe-03-19-343-en-n.pdf
Amendment 141 #
Motion for a resolution Paragraph 10 c (new) 10 c. Underlines that according to International Monetary Fund31a, even though corporate tax rates have been on a downward trend, CIT revenue collection in percent of GDP has remained remarkably constant over time, taking account of the business cycle; _________________ 31a https://www.elibrary.imf.org/view/journals /087/2021/012/article-A001-en.xml
Amendment 142 #
Motion for a resolution Paragraph 11 Amendment 143 #
Motion for a resolution Paragraph 11 Amendment 144 #
Motion for a resolution Paragraph 11 Amendment 145 #
Motion for a resolution Paragraph 11 11. Insists that the future implementation of new EU tools against HTP should
Amendment 146 #
Motion for a resolution Paragraph 11 11. Insists that the future implementation of new EU tools against HTP should prioritise the recourse to
Amendment 147 #
Motion for a resolution Paragraph 11 11. Insists that the future implementation of new EU tools against HTP should prioritise the recourse to legislative instruments and explore the provisions of the TFEU (including Article 116) allowing decision-
Amendment 148 #
Motion for a resolution Paragraph 11 11. Insists that the future implementation of new EU tools against HTP should prioritise the recourse to legislative instruments and explore the provisions of the TFEU allowing decision- making to be facilitated,
Amendment 149 #
Motion for a resolution Paragraph 11 11.
Amendment 15 #
Motion for a resolution Recital B B. whereas the EU has developed the concept of good governance in the tax area against harmful tax measures based on the Commission’s communication of 28.4.2009(COM(2009) 201) final; whereas anti-tax avoidance policies have led to a decline in preferential regimes all around the world, particularly in the Union; whereas new forms of HTP have emerged, notably through the transformation of preferential regimes into aggressive general regimes;
Amendment 150 #
Motion for a resolution Paragraph 11 11. Insists that the future implementation of new EU tools against HTP should prioritise the recourse to legislative instruments and explore the
Amendment 151 #
Motion for a resolution Paragraph 11 a (new) 11 a. Notes that beyond HTP a significant amount of government funding is channeled through tax expenditure in the form of exemptions, deductions, credits, deferrals and reduced tax rates 1a _________________ 1a The tax-expenditure-to-GDP ratio is on average 4.5 percentage points in the EU; https://www.cepweb.org/reforming-tax- expenditures/; IMF, ‘Tax Policy for Inclusive Growth after the Pandemic’, 16 December 2020, https://www.imf.org/en/Publications/SPR OLLs/covid19-special-notes#fiscal
Amendment 152 #
Motion for a resolution Paragraph 11 a (new) 11 a. Stresses that the Treaties and spirit of good cooperation require tax policies to be coordinated consensually, respecting national sovereignty;
Amendment 153 #
Motion for a resolution Paragraph 11 b (new) 11 b. Calls on Member States to revise tax expenditure in all tax areas; calls on Member States to perform annual, detailed and public cost-benefit analyses of each tax provision; notes that tax incentives should aim at attracting investments in the ‘real’ economy, profit- based tax incentives, such as patent boxes, should be avoided as these often lead to abusive schemes and loss of revenues;
Amendment 154 #
Motion for a resolution Paragraph 11 b (new) 11 b. Warns that qualified majority voting would increase the risk of introducing one-size-fits-all approach at the expense of the most competitive Member States, thus damaging the tax competitiveness of European Union;
Amendment 155 #
Motion for a resolution Paragraph 12 12.
Amendment 156 #
Motion for a resolution Paragraph 12 12. Calls on the Commission to evaluate the effectiveness of patent boxes and other intellectual property (IP) regimes under the new nexus approach defined by Action 5 of the BEPS Action Plan on HTP; calls on the Commission to come forward with a legislative proposal in case the evaluation confirms the ineffectiveness of patent boxes; recalls that so far evidence suggests that ‘output-based’ R&D tax incentives such as patent boxes have mostly been used by firms for profit shifting purposes and have had little impact on real economic activities 1a _________________ 1aIMF report, Taxing Multinationals in Europe, 2021: https://www.imf.org/en/Publications/Depa rtmental-Papers-Policy- Papers/Issues/2021/05/25/Taxing- Multinationals-in-Europe-50129
Amendment 157 #
Motion for a resolution Paragraph 12 12. Calls on the Commission to evaluate the effectiveness of patent boxes and other intellectual property (IP) regimes under the new nexus approach defined by
Amendment 158 #
Motion for a resolution Paragraph 12 a (new) 12 a. Highlights the growing increasingly important role played by the European Semester in monitoring and making recommendations on tax policies in the EU; believes the European Semester should be used as a tool to curb aggressive tax planning within the EU by making recommendations on adopting robust rules to prevent tax avoidance, repealing rules that can be misused and lead to aggressive tax planning, and by exposing national tax practices that can be deemed as harmful;
Amendment 159 #
Motion for a resolution Paragraph 12 a (new) 12 a. Calls on the Commission to provide an assessment of all ineffective tax expenditures leading to negative economic distortions; calls on the Commission to establish a screening framework for tax expenditures in the EU and oblige member states to publish the fiscal costs of tax expenditures;
Amendment 16 #
Motion for a resolution Recital B B. whereas anti-tax avoidance policies
Amendment 160 #
Motion for a resolution Paragraph 12 a (new) 12 a. Calls for the review of the Transparency Criteria, in particular to finalise the inclusion of point 1.4 global exchange of beneficial ownership; urges in particular a clear assessment of the United States regarding the transparency criteria;
Amendment 161 #
Motion for a resolution Paragraph 12 b (new) 12 b. Highlights that some bilateral tax treaties established between EU countries and developing countries have harmful effects on the latter, including by raising the levels of poverty. Notes that this is inconsistent with the spirit of cooperation predicted in the TFEU;
Amendment 162 #
Motion for a resolution Paragraph 12 b (new) 12 b. Calls on the Commission to produce guidelines on how to design tax incentives with fewer risks of distorting the Single Market;
Amendment 163 #
Motion for a resolution Paragraph 12 c (new) 12 c. 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 164 #
Motion for a resolution Paragraph 13 13. Welcomes the fact that the CoC has
Amendment 165 #
Motion for a resolution Paragraph 13 13. Welcomes the fact that the CoC has assessed 480 regimes since its creation, deeming around 13030 harmful31 ; recognises the positive effect of the Union’s work on HTP, which has led to a quasi-disappearance of preferential tax
Amendment 166 #
Motion for a resolution Paragraph 13 13. Welcomes the fact that the CoC has assessed 480 regimes since its creation, deeming around 13030 harmful31 ; recognises the positive effect of the Union’s work on HTP, which has led to a quasi-disappearance of preferential tax regimes within the Union; however, emphasizes the need to improve the Code’s effectiveness in light of recent tax scandals and challenges such as globalisation, digitalisation and the growing importance of intangible assets; _________________ 30Exchange of views of the Subcommittee on Tax Matters (FISC) with Lyudmila Petkova, Chair of the Code of Conduct Group, held on 19 April 2021. 31
Amendment 167 #
Motion for a resolution Paragraph 13 13. Welcomes the fact that the CoC has assessed 480 regimes since its creation, deeming around 13030 harmful31 ;
Amendment 168 #
Motion for a resolution Paragraph 13 13. Welcomes the fact that the CoC has assessed 480 regimes since its creation, deeming around 13030 harmful31; recognises the positive effect of the Union’s work on HTP, which has led to
Amendment 169 #
Motion for a resolution Paragraph 14 14. Highlights the non-binding nature of the CoC; deplores the fact that Member States could maintain a harmful regime without facing any repercussions; notes that the political nature of the Code, together with ‘broad consensus’ rule for reaching decisions on harmfulness, has given too much leeway for procrastination and blocking of decision-making by Member States; notes further that in some cases, the Group's work has, therefore, led to inconsistent and unsatisfactory results such as the inadequate prevention of unfair tax competition 1a; recalls, for example, how for a significant amount of time notional interest deduction schemes remained largely untouched leading to significant tax revenues losses and negative spillover for both EU and non- EU countries; _________________ 1aInside the EU Code of Conduct Group: 20 Years of tackling Harmful Tax Competition, PhD, Martijn F. Nouwen
Amendment 17 #
Motion for a resolution Recital B B. whereas the nature of HTP has evolved over the last decades; whereas anti-tax avoidance policies have led to a decline in preferential regimes all around the world, particularly in the Union; whereas new forms of HTP have emerged, notably through the transformation of preferential regimes into aggressive general regimes;
Amendment 170 #
Motion for a resolution Paragraph 14 14. Highlights the non-binding nature of the CoC; deplores the fact that Member States could maintain a harmful regime without facing any repercussions; leading to unsatisfactory results ; deplores the fact that some Member States have not repealed tax regimes labelled ‘harmful’ before a long period of time and have not exchanged the relevant information regarding their potentially harmful regimes, such as tax rulings, prior to scandals revelations; is of the opinion that the Union should develop tools to enforce its policy against HTP;
Amendment 171 #
Motion for a resolution Paragraph 14 14. Highlights the non-binding nature of the CoC; deplores the fact that Member States could maintain a harmful regime without facing any repercussions, highlighting in this regard that EU blacklisted countries are responsible for less than 2 percent of global tax losses, in comparison, EU member states are responsible for 36 percent34;
Amendment 172 #
Motion for a resolution Paragraph 14 14. Highlights the non-binding nature of the CoC;
Amendment 173 #
Motion for a resolution Paragraph 14 14. Highlights the non-binding nature of the CoC;
Amendment 174 #
Motion for a resolution Paragraph 14 14. Highlights th
Amendment 175 #
Motion for a resolution Paragraph 14 Amendment 176 #
Motion for a resolution Paragraph 14 14. Highlights the non-binding nature of the CoC;
Amendment 177 #
Motion for a resolution Paragraph 14 14.
Amendment 178 #
Motion for a resolution Paragraph 14 14. Highlights the non-binding nature of the CoC;
Amendment 179 #
Motion for a resolution Paragraph 15 Amendment 18 #
Motion for a resolution Recital B a (new) B a. whereas fighting tax fraud and tax evasion should not diminish the fruitful benefits of the tax competition among Member States;
Amendment 180 #
Motion for a resolution Paragraph 15 Amendment 181 #
Motion for a resolution Paragraph 15 15. Calls for a complete revision of the criteria, the governance and the scope of the CoC through a legally binding instrument that should replace the current intergovernmental arrangements and allow for a transition to qualified majority voting; deeply deplores the inaction by the Council to comprehensively revise the criteria after two decades; believes the revision of the CoC should be conducted in a democratic, transparent and accountable process instead of the current secretive technical one; requires that Parliament be included in the process of designing and adopting new policies and criteria to combat HTP;
Amendment 182 #
Motion for a resolution Paragraph 15 15. Calls for
Amendment 183 #
Motion for a resolution Paragraph 15 15. Calls for a revision of the criteria, the governance and the scope of the CoC through a legally binding instrument that should replace the current intergovernmental arrangements and allow for a transition to qualified majority voting; calls for the Commission to explore the right legal basis offered by the Treaties to make such a proposal possible as soon as possible; requires that Parliament be included in the process of designing and adopting new policies and criteria to combat HTP;
Amendment 184 #
Motion for a resolution Paragraph 15 15. Calls for a revision of the criteria, the governance and the scope of the CoC
Amendment 185 #
Motion for a resolution Paragraph 15 15. Calls for a revision of the criteria, the governance and the scope of the CoC
Amendment 186 #
Motion for a resolution Paragraph 15 15. Calls for a revision of the criteria, the governance and the scope of the CoC through a
Amendment 187 #
Motion for a resolution Paragraph 15 15. Calls for a revision of the criteria, the governance and the scope of the CoC through a
Amendment 188 #
Motion for a resolution Paragraph 15 15. Calls for a revision of the criteria, the governance and the scope of the CoC preferably through a legally binding instrument that should replace the current intergovernmental arrangements and allow for a transition to qualified majority voting; requires that Parliament be included in the process of designing and adopting new policies and criteria to combat HTP;
Amendment 189 #
Motion for a resolution Paragraph 15 15. Calls for a revision of the criteria, the governance and the scope of the CoC through a legally binding instrument that should replace the current intergovernmental arrangements and allow for a transition to qualified majority voting; requires that Parliament be fully included in the process of designing and adopting new policies and criteria to combat HTP;
Amendment 19 #
Motion for a resolution Recital B b (new) B b. whereas taxation is the sole competence of the Member States and is subject to the unanimity requirement within the Council; whereas the Parliament fully respects the principle of national tax sovereignty;
Amendment 190 #
Motion for a resolution Paragraph 15 a (new) 15 a. Calls for the same criteria of the list of non-cooperative jurisdictions to be use to assess Member States and third countries and to give the same visibility on the assessment of both; highlights that research has suggested that five EU Member States – Cyprus, Ireland, Luxembourg, Malta and the Netherlands – would be considered tax havens if subjected to the EU listing process. Calls further to consider designing mechanisms to better include the voices of non-EU countries in this process, for example by creating a working group or a consultative body that brings together non-EU countries, civil society and experts;
Amendment 191 #
Motion for a resolution Paragraph 16 Amendment 192 #
Motion for a resolution Paragraph 16 16. Considers the reform of the criteria
Amendment 193 #
Motion for a resolution Paragraph 16 16. Considers the reform of the criteria of the CoC to be a matter of urgency
Amendment 194 #
Motion for a resolution Paragraph 16 16. Considers the reform of the criteria of the CoC to be a matter of urgency and that it should assess, all regimes proposing a tax rate below the future internationally agreed minimum effective tax rate in the framework of Pillar II of the Inclusive Framework as being potentially harmful, unless the revenues qualifying for a deduction or a reduced tax rate comply with robust and progressive economic substance requirements; advises a minimum effective rate of 21 %, following the recommendations of the US Administration in the Made in America Tax Plan;
Amendment 195 #
Motion for a resolution Paragraph 16 16. Considers the reform of the criteria of the CoC to be a matter of urgency and that it should assess all regimes
Amendment 196 #
Motion for a resolution Paragraph 16 16. Considers the reform of the criteria of the CoC to be a matter of urgency and that it should assess, beyond preferential regimes, all regimes proposing a tax rate below the future internationally agreed minimum effective tax rate in the framework of Pillar II of the Inclusive Framework as being potentially harmful, unless the revenues qualifying for a deduction or a reduced tax rate comply with robust and progressive economic substance requirements ;
Amendment 197 #
Motion for a resolution Paragraph 16 16. Considers the reform of the criteria of the CoC to be a matter of urgency and that it
Amendment 198 #
Motion for a resolution Paragraph 16 16. Considers the reform of the criteria of the CoC to be a matter of urgency and that it should assess, as a first step, all regimes proposing a tax rate below the future internationally agreed minimum effective tax rate in the framework of Pillar II of the Inclusive Framework as being potentially harmful, unless the revenues qualifying for a deduction or a reduced tax rate comply with robust and progressive economic substance requirements;
Amendment 199 #
Motion for a resolution Paragraph 16 a (new) Amendment 2 #
Motion for a resolution Citation 12 a (new) — having regard to the European Parliament’s position on the Commission’s proposals on the Common Corporate Tax Base (CCTB), the Common Consolidated Corporate Tax Base (CCCTB),
Amendment 20 #
Motion for a resolution Recital B c (new) B c. whereas the Parliament acknowledges it has no legislative power in the area of direct taxation;
Amendment 200 #
Motion for a resolution Paragraph 16 a (new) 16 a. Recalls that the COVID-19 pandemic has plunged Europe’s economy into its deepest recession in modern times, with just recent signs of recovery; recalls, that as part of their response to the COVID-19pandemic, governments across the EU were quick to introduce tax measures to provide liquidity to both businesses and households1a resulting in lower tax revenues for Member States; calls for business taxation to be a tool to support recovery through simple, stable and SME-friendly tax rules that do not hamper the economic recovery by introducing excessive tax measures; _________________ 1aEuropean Commission, Annual Report on Taxation 2021
Amendment 201 #
Motion for a resolution Paragraph 16 a (new) 16 a. Calls on the CoC to equally assess all countries and jurisdictions in scope independently of their geopolitical and economic power; deplores the lack of consistency and unequal treatment of certain countries in the EU blacklisting procedure; observes the unequal playing field between countries adhering to the OECD Common Reporting Standard and US FATCA; calls on the CoC to stringently assess the United States;
Amendment 202 #
Motion for a resolution Paragraph 17 Amendment 203 #
Motion for a resolution Paragraph 17 Amendment 204 #
Motion for a resolution Paragraph 17 17. Urges an enlargement of the scope of the CoC, notably by including
Amendment 205 #
Motion for a resolution Paragraph 17 17. Urges an enlargement of the scope of the CoC, notably by including preferential personal income or capital tax regimes, or personal income and wealth tax regimes that could lead to significant Single Market distortions, so the CoC scope captures regimes aimed at attracting high net worth and high level of income not created in the Member State proposing the tax regime;
Amendment 206 #
Motion for a resolution Paragraph 17 17.
Amendment 207 #
Motion for a resolution Paragraph 17 17.
Amendment 208 #
Motion for a resolution Paragraph 17 17.
Amendment 209 #
Motion for a resolution Paragraph 17 17. Urges an enlargement of the scope of the CoC, notably by including preferential personal income or capital tax regimes, or personal income and wealth tax regimes that could lead to
Amendment 21 #
Motion for a resolution Recital B d (new) B d. whereas tax collection is individual responsibility of each Member State;
Amendment 210 #
Motion for a resolution Paragraph 17 a (new) Amendment 211 #
Motion for a resolution Paragraph 17 a (new) Amendment 212 #
Motion for a resolution Paragraph 17 a (new) 17 a. Understand that the CoC is working on a new 3-step approach to assess the harmfulness of general characteristics in tax systems: (1) whether the characteristic leads to double non- taxation or double tax relief; (2) if yes, whether the characteristic has an effect on the place of residency or the place of economic activity and (3) whether there is a causal effect between step 1 and step 2; welcomes the CoC’s work on this, however, urges the CoC to aim at a full revision of the CoC as outlined in this report;
Amendment 213 #
Motion for a resolution Paragraph 17 b (new) Amendment 214 #
Motion for a resolution Paragraph 18 18.
Amendment 215 #
Motion for a resolution Paragraph 18 18. Requires that the body in charge of implementing the Union policies against HTP, which is currently the CoC Group appear at least once a year before Parliament;
Amendment 216 #
Motion for a resolution Paragraph 18 18.
Amendment 217 #
18.
Amendment 218 #
Motion for a resolution Paragraph 18 18. Requires that the CoC Group appears at least
Amendment 219 #
Motion for a resolution Paragraph 18 18. Requires that the Chair CoC Group appear at least once a year at a public hearing before Parliament;
Amendment 22 #
Motion for a resolution Recital C C. whereas aggressive tax planning means the deliberate exploitation of loopholes and mismatches within and between national tax systems to artificially reduce the tax contribution of companies
Amendment 220 #
Motion for a resolution Paragraph 19 19. Welcomes the publication of the biannual reports of the CoC Group to the Council; believes that a dedicated online tool should be created to avoid relying only on Council conclusions to retrieve essential information about tax policy at EU level; considers that the methodology for assessing EU Member States should be fully disclosed; invites the Code of Conduct Group to systematically release a comprehensive summary of its assessments of EU Member States; calls for the public information to be made available on a user-friendly platform;
Amendment 221 #
Motion for a resolution Paragraph 19 19. Welcomes the publication of the biannual reports of the CoC Group to the Council; believes that a dedicated online tool should be created to
Amendment 222 #
Motion for a resolution Paragraph 19 19. Welcomes the publication of the biannual reports of the CoC Group to the Council; appreciates the efforts made to release CoC Group-related documents and work; regret show ever the lack of accessibility of that information and believes that a dedicated online tool should be created to avoid relying only on Council conclusions to retrieve essential information about tax policy at EU level;
Amendment 223 #
Motion for a resolution Paragraph 19 19. Welcomes the publication of the biannual reports of the CoC Group to the Council, as well as any other considered relevant documents; believes that a dedicated online tool should be created, such as an archive of all documents and minutes in a consistent and user-friendly way, to avoid relying only on Council conclusions to retrieve essential information about tax policy at EU level;
Amendment 224 #
19 a. Welcomes the publication of the composition and contacts of the CoC Group in order to improve the transparency of its work; calls on the CoC to disclose attendees to, the topics of discussion and the conclusions adopted in its meetings; calls for full transparency of the methodology used for assessing third- country regimes in the EU listing process; invites the CoC to systematically release a comprehensive summary of its interactions with third countries, the subject matters discussed and the commitments made by third countries during the assessment process; calls on both the Council and the Commission to publish their preparatory notes, technical assessments and minutes;
Amendment 23 #
Motion for a resolution Recital C C. whereas "aggressive tax planning
Amendment 24 #
Motion for a resolution Recital C C. whereas aggressive tax planning means the deliberate exploitation of loopholes and mismatches within and between national tax systems to artificially reduce the tax contribution of companies, particularly multinational corporations, to national tax systems; whereas empirical evidence suggests that MNEs’ profits tend to be taxed less than profits of domestic peers, reflecting profit shifting from high- to low-tax affiliates1a; _________________ 1aIMF report, Taxing Multinationals in Europe, 2021: https://www.imf.org/en/Publications/Depa rtmental-Papers-Policy- Papers/Issues/2021/05/25/Taxing- Multinationals-in-Europe-50129
Amendment 25 #
Motion for a resolution Recital C a (new) Ca. whereas high tax levels directly affect the economic activity of businesses and citizens, particularly jobs and wages; whereas consideration should therefore be given to the damage this can cause to state revenue and the economic sustainability and viability of our welfare state and social policies;
Amendment 26 #
Motion for a resolution Recital C a (new) C a. whereas it results in financial losses to EU Member States, which is a problem especially for the recovery from the sanitary, social and economic crisis caused by the Covid-19 pandemic, for the financing of the green transition and which moves the tax burden to lower households;
Amendment 27 #
Motion for a resolution Recital C a (new) C a. whereas the work conducted by the Union against HTP includes the adoption of legislation, soft law, and intergovernmental cooperation;
Amendment 28 #
Motion for a resolution Recital C b (new) C b. whereas according to the IMF strong tax competition in Europe appears to have been a major driving force behind the steep decline in corporate income tax (CIT)rates that has brought the average European CIT rate below the average rate in OECD countries; whereas the implied revenue losses of such a large drop in CIT rates are significant for all countries involved; whereas tax competition in Europe is also reflected in the proliferation of preferential tax regimes for income from intellectual property (IP boxes);2 2 Ernesto Crivelli ; Ruud A. de Mooij ; J. E. J. De Vrijer ; Shafik Hebous ; Alexander D Klemm, Taxing Multinationals in Europe, International Monetary Fund, 25 May 2021, available at https://imf.orf/en/Publications/Departmen tal-Papers-Policy- Papers/Issues/2021/05/25/Taxing- Multinationals-in-Europe-50129
Amendment 29 #
Motion for a resolution Recital C b (new) Cb. whereas it is the Member States which are competent in the field of taxation, promoting free competition which enriches the EU economy, as well as the sovereignty of the Member States and the freedom of citizens and businesses to invest; whereas any attempt to standardise the Member States' tax regimes undermines the raison d’être of the Union and the free market;
Amendment 3 #
Motion for a resolution Citation 12 b (new) — having regard to the Commission communication of 18 May 2021 on Business taxation for the 21st century,
Amendment 30 #
Motion for a resolution Recital C b (new) C b. whereas independent research 24 suggests EU member states collectively lose most corporate tax revenues to other EU member states than third countries; underlines that the main cause for this loss of revenues is the lack of legislative action against intra-EU aggressive tax practices and harmful tax competition;
Amendment 31 #
Motion for a resolution Recital C c (new) C c. whereas aggressive tax planning within the union is the most significant source of corporate tax base erosion and corporate tax avoidance impacting EU Member States 25
Amendment 32 #
Motion for a resolution Recital D a (new) Amendment 33 #
Motion for a resolution Recital E E. whereas the
Amendment 34 #
Motion for a resolution Recital E E. whereas the CoC Group was efficient in deterring preferential tax regimes;
Amendment 35 #
Motion for a resolution Recital E E. whereas the CoC Group was efficient in deterring preferential tax regimes;
Amendment 36 #
Motion for a resolution Recital E E. whereas the CoC Group was efficient in deterring preferential tax regimes; whereas
Amendment 37 #
Motion for a resolution Recital E E. whereas the CoC Group was efficient in deterring preferential tax regimes; whereas it has nonetheless failed to prevent aggressive tax competition between Member States; whereas
Amendment 38 #
Motion for a resolution Recital E E. whereas the CoC Group was efficient in deterring preferential tax regimes; whereas it has
Amendment 39 #
Motion for a resolution Recital E E. whereas the CoC Group was efficient in deterring preferential tax regimes; whereas it has nonetheless failed to prevent aggressive tax competition between Member States; whereas the CoC Group has further failed to eradicate unfairly advantageous tax arrangements offered by some Member States to large companies and the consequential unfair competitive advantage created, such as harmful advance pricing arrangement (‘tax rulings’); whereas the CoC Group remains of purely intergovernmental nature;
Amendment 4 #
Motion for a resolution Citation 22 b (new) — having regard to the Commission Communication of 18 May 2021 on Business Taxation for the 21st Century,
Amendment 40 #
Motion for a resolution Recital E E. whereas the CoC Group was efficient in deterring specific categories of preferential tax regimes; whereas it has nonetheless failed to prevent aggressive tax competition between Member States; whereas its latest peer review assessments mostly dealt with Intellectual Property (IP) regimes; whereas the CoC Group remains of purely intergovernmental nature;
Amendment 41 #
Motion for a resolution Recital E a (new) E a. whereas the failure to curb excessive tax competition has contributed to the shifting of the tax incidence from wealth to income, from capital income to labour income and consumption, from MNEs to SMEs and from the financial sector to the real economy; whereas women and low income group are most impacted by tax avoidance and an unfair and biased tax system;
Amendment 42 #
Motion for a resolution Recital E a (new) E a. whereas both pillars of the future global agreement are in line with the Commission’s vision for a business taxation framework for the 21st century; whereas the Commission's announcement of a directive that will reflect the OECD Model Rules with the necessary adjustment for the implementation of Pillar II on minimum effective taxation;
Amendment 43 #
Motion for a resolution Recital F F. whereas the CoC Group was successful in opening a dialogue with third-country jurisdictions that are invited to repeal their HTP in order to avoid being included on an EU list of non-cooperative jurisdictions for tax purposes (the ‘EU list’); whereas the current EU list
Amendment 44 #
Motion for a resolution Recital F F. whereas the CoC Group was successful in opening a dialogue with third-country jurisdictions that are invited to repeal their HTP in order to avoid being included on an EU list of non-cooperative jurisdictions for tax purposes (the ‘EU list’); whereas the current EU list only comprises 12 jurisdictions25 and regretfully leaves out notorious tax havens; whereas the EU list is established on the basis of criteria defined in the CoC; whereas the criteria applied to third-country jurisdictions are not the same as those applied to EU Member States leading to divergences; _________________ 25American Samoa; Anguilla; Dominica; Fiji; Guam; Palau; Panama; Samoa; Trinidad and Tobago; US Virgin Islands; Vanuatu; Seychelles.
Amendment 45 #
Motion for a resolution Recital F a (new) F a. whereas the European Commission has adopted a Communication on Tax Good Governance in the EU and beyond that foresees a reform of the Code of Conduct and improvements to the EU list of non- cooperative jurisdictions; whereas this matter is subject to an intergovernamental approach and the Parliament, in full respect for the institutional framework, want to underline it´s views on the procedure conducting to such reforms;
Amendment 46 #
Motion for a resolution Recital F a (new) F a. whereas the State of Tax Justice 2020 report found that a mere 2% of global tax losses were caused by jurisdictions on the EU list in comparison, EU member states are found to be responsible for 36% of global tax losses, costing countries worldwide over $154 billion in lost tax every year1a; _________________ 1a https://www.taxjustice.net/2020/11/20/427 bn-lost-to-tax-havens-every-year- landmark-study-reveals-countries-losses- and-worst-offenders/
Amendment 47 #
Motion for a resolution Recital F b (new) F b. whereas very high financial activity, as compared to the size of the economy, may indicate that a country is being used for tax avoidance purposes; whereas according to the latest Eurostat data the stock of Luxembourgish direct investment abroad represents nearly 65 times its GDP, while the stock of foreign direct investment in Luxembourg represents about 55 times its GDP; whereas to a lesser extent Cyprus, Malta, the Netherlands and Ireland also display stock of inward or outward foreign investment much larger than their respective domestic production1a; _________________ 1ahttps://op.europa.eu/en/publication- detail/-/publication/db46de2a-b785-11eb- 8aca-01aa75ed71a1/language-en
Amendment 48 #
Motion for a resolution Recital F c (new) F c. whereas in some instances, direct investment via special purpose entities (SPEs) may be vehicle for tax planning; whereas Cyprus, Malta, Luxembourg and the Netherlands, along with Hungary, displayed a significant use of SPEs for both inward and outward FDI1a; _________________ 1ahttps://op.europa.eu/en/publication- detail/-/publication/db46de2a-b785-11eb- 8aca-01aa75ed71a1/language-en
Amendment 49 #
Motion for a resolution Recital F d (new) F d. whereas some tax avoidance strategies involve (re)locating intangible assets to jurisdictions offering favourable conditions; whereas a high volume of royalty payments, particularly when relative to GDP, might be indicative of loopholes in tax legislation; whereas Ireland is the country that displays the highest ratio of outgoing royalty flows relatively to its GDP, with the Netherlands, Luxembourg and Malta also having high ratios; whereas in terms of incoming royalties, the Netherlands, Ireland and Luxembourg display the most significant flows relative to their respective GDP1a; _________________ 1ahttps://op.europa.eu/en/publication- detail/-/publication/db46de2a-b785-11eb- 8aca-01aa75ed71a1/language-en
Amendment 5 #
Motion for a resolution Citation 28 a (new) — having regard to the Commission Communication on Business Taxation for the 21st Century of 18 May 20211a; _________________ 1a COM(2021) 251 final
Amendment 50 #
Motion for a resolution Recital F e (new) Amendment 51 #
Motion for a resolution Recital F f (new) F f. whereas some multinationals reroute their dividends to reduce taxation; whereas in the absence of withholding taxes, such payments can escape taxation if they are not taxed in the recipient jurisdiction which results in disproportionally high flows of outgoing dividend payments; whereas Malta, Luxembourg, Cyprus and, to a lesser extent, the Netherlands have a significantly high outgoing dividend-to- GDP ratio and, with the exception of Malta, incoming dividend-to-GDP ratio1a; _________________ 1ahttps://op.europa.eu/en/publication- detail/-/publication/db46de2a-b785-11eb- 8aca-01aa75ed71a1/language-en
Amendment 52 #
Motion for a resolution Recital F g (new) F g. whereas Member States such as Netherlands, Luxembourg, Malta, Cyprus, Belgium, Ireland and Hungary have since 2018 received country-specific recommendations in the framework of the European Semester on the need to address risk of aggressive tax planning;
Amendment 53 #
Motion for a resolution Paragraph 1 1.
Amendment 54 #
Motion for a resolution Paragraph 1 1. Stresses that tax evasion and tax avoidance result in an unacceptable loss of substantial revenue for Member States, currently needed to address the devastating consequences of the pandemic; recalls the conservative estimates by the OECD on BEPS which costs around 4-10 % of global corporate income tax revenues, or USD 100-240 (EUR 84-202) billion annually26 ; recalls that Parliament’s estimates of corporate tax avoidance range from EUR 160 to 190 billion when both BEPS and other tax regimes are considered27 ; deplores that no other study quantifying the scale of tax evasion and avoidance has been made available since 2016 and calls on the Commission to undertake such assessment as it does for the VAT Gap annually; _________________ 26 https://www.oecd.org/tax/beps/ 27 Drover, R., Ferrett, B., Gravino, D., Jones, E. and Merler, S., Bringing transparency, coordination and convergence to corporate tax policies in the
Amendment 55 #
Motion for a resolution Paragraph 1 a (new) 1 a. Recalls that Member States are free to decide on the economic policy and in particular on their tax policies which they consider most appropriate; recalls, in this regard, that Member States need to exercise their competences consistently with Union law; shares the Commission’s observation outlined in its communication of15.7.2020 that “ whilst tax competition among countries is not problematic per se, there need to be common principles on the extent to which they can use their tax regimes and policies to attract businesses and profits”;
Amendment 56 #
Motion for a resolution Paragraph 1 a (new) 1 a. Recognises the sensitivity of Member States’ competence over taxation; welcomes in this regard that major progress has been achieved on cooperation between the tax authorities of the Member States over the last decade; supports further discussions among Member States in order to strengthen the administrative cooperation;
Amendment 57 #
Motion for a resolution Paragraph 1 a (new) 1 a. Notes that several tax scandals have boosted the EU policy agenda on HTP, and notably the Luxleaks, the Panama Papers, the Paradise Papers and more recently, the OpenLux revelations;
Amendment 58 #
Motion for a resolution Paragraph 1 b (new) 1 b. Stresses that emphasis shall be put on proper implementation and monitoring of existing rules rather than on harmonisation of tax legislation;
Amendment 59 #
Motion for a resolution Paragraph 1 c (new) 1 c. Stresses that while tax fraud represents illegal activity that needs to be prosecuted by law, tax optimisation and tax planning often represent legal activities that can be tackled by making the tax systems more competitive, simplified, and transparent; encourages the Commission and Member States to share the best practices in this regard;
Amendment 6 #
Motion for a resolution Citation 20 a (new) Amendment 60 #
Motion for a resolution Paragraph 1 d (new) 1 d. Warns that high levels of taxation in European Union create an unintended incentive for tax evasion and tax optimisation;
Amendment 61 #
Motion for a resolution Paragraph 1 e (new) 1 e. Considers that tax competition is the main mechanism helping Member States to identify and close the loopholes and shortcomings responsible for tax evasion;
Amendment 62 #
Motion for a resolution Paragraph 2 2. Notes the variety of EU instruments adopted to address HTP inside the Union, which include ATAD I and II, the Interest and Royalties Directive, the Parent Subsidiary Directive, the Directive on Administrative Cooperation in the Field of Taxation, and, in particular, DAC 3, 4 and 6 (on tax rulings, country-by-country reporting and mandatory disclosure rules for intermediaries), the various Commission recommendations to the Council, the CoC, and the Council recommendations in the framework of the European Semester dealing with aggressive tax planning; recalls that these instruments 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 is still blocked in Council; observes that as a result these EU instruments have not prevented 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 63 #
Motion for a resolution Paragraph 2 2.
Amendment 64 #
Motion for a resolution Paragraph 2 2. Notes the variety of EU instruments adopted to address HTP inside the Union, which include ATAD I and II, the Interest and Royalties Directive, the Parent
Amendment 65 #
Motion for a resolution Paragraph 2 2. Notes the variety of EU instruments adopted to address HTP inside the Union, which include ATAD I and II, the Interest and Royalties Directive, the Parent Subsidiary Directive, the Directive on Administrative Cooperation in the Field of Taxation, and, in particular, DAC 3, 4 and 6 (on tax rulings, country-by-country reporting and mandatory disclosure rules for intermediaries), the various Commission recommendations to the Council, the CoC, and the Council recommendations in the framework of the European Semester dealing with aggressive tax planning; calls upon EU legislators to find a quick agreement on the public country-by-country (CbCR) reporting file;
Amendment 66 #
Motion for a resolution Paragraph 2 a (new) 2 a. 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, in order to act when harmful tax practices lead to market distortion within the Union, has never been used so far;
Amendment 67 #
Motion for a resolution Paragraph 2 a (new) 2 a. Reminds that the European rules on administrative cooperation do not replace national rules but rather provide minimum standards for cooperative actions and information exchange;
Amendment 68 #
Motion for a resolution Paragraph 2 b (new) Amendment 69 #
Motion for a resolution Paragraph 3 3. Welcomes the internal and external dimension of the work conducted by the CoC Group on HTP; notes that the external dimension of HTP is mainly dealt with by the CoC Group with the application of the ‘Fair Taxation’ criterion;
Amendment 7 #
Motion for a resolution Citation 22 a (new) — having regard to the IMF report on Taxing Multinationals in Europe1 1 Ernesto Crivelli ; Ruud A. de Mooij ; J. E. J. De Vrijer ; Shafik Hebous ; Alexander D Klemm, Taxing Multinationals in Europe, International Monetary Fund, 25 May 2021, available at https://imf.orf/en/Publications/Departmen tal-Papers-Policy- Papers/Issues/2021/05/25/Taxing- Multinationals-in-Europe-50129
Amendment 70 #
Motion for a resolution Paragraph 3 3. Welcomes the internal and external dimension of the work conducted by the CoC Group on HTP; notes that the external dimension of HTP is mainly dealt with by the CoC Group with the application of the
Amendment 71 #
Motion for a resolution Paragraph 3 3. Welcomes the internal and external dimension of the work conducted by the CoC Group on HTP; notes that the external dimension of HTP is mainly dealt with by the CoC Group with the application of the ‘Fair Taxation’ criterion;
Amendment 72 #
Motion for a resolution Paragraph 3 3. Welcomes the internal and external dimension of the work conducted by the CoC Group on HTP; notes that the external dimension of HTP is mainly dealt with by the CoC Group with the application of the ‘Fair Taxation’ criterion;
Amendment 73 #
Motion for a resolution Paragraph 3 3. Welcomes the internal and external dimension of the work conducted by the CoC Group on HTP; notes that the external dimension of HTP is mainly dealt with by the CoC Group with the application of the ‘Fair Taxation’ criterion; deplores the lack of coherence between the criteria on HTP applied to Member States and the tougher criteria, in particular on economic substance, applied to third-country jurisdictions in the listing process; welcomes in this regard the proposal by the European Commission in its Communication on Business Taxation for the 21st century to initiate a legislative proposal to enforce substance rules on shell companies in the EU; still regrets that third jurisdictions with a 0 % corporate tax rate or with no taxes on companies’ profits are not automatically listed; in addition, deplores the fact that the ‘Transparency’ criterion in the EU list of non-cooperative jurisdictions leads to unequal outcomes between EU Member States, most notably Malta, and third- country jurisdictions; calls on the Commission to launch infringement procedures to ensure EU Member States fully comply with tax transparency standards in order to avoid a situation in which third-country jurisdictions are listed whereas EU Member States failing the same criteria face no consequences;
Amendment 74 #
Motion for a resolution Paragraph 3 3. Welcomes the internal and external dimension of the work conducted by the CoC Group on HTP; notes that the external dimension of HTP is mainly dealt with by the CoC Group with the application of the ‘Fair Taxation’ criterion; deplores the lack of coherence between the criteria on HTP applied to Member States and the tougher criteria, in particular on economic substance, applied to third-country jurisdictions in the listing process; recalls that the initial listing process was proposed by the Commission in both its communication on an external strategy for effective taxation and its communication on further measures to enhance transparency and the fight against tax evasion;
Amendment 75 #
Motion for a resolution Paragraph 3 3. Welcomes the internal and external dimension of the work conducted by the CoC Group on HTP; notes that the external dimension of HTP is mainly dealt with by the CoC Group with the application of the ‘Fair Taxation’ criterion; considers that the EU list needs to be reformed at EU level; recommends that its process be formalised, notably via a legally binding instrument; deplores the lack of coherence between the criteria on HTP applied to Member States and the tougher criteria, in particular on economic substance, applied to third-country jurisdictions in the listing process;
Amendment 76 #
Motion for a resolution Paragraph 3 3. Welcomes the internal and external dimension of the work conducted by the CoC Group on HTP; notes that the external dimension of HTP is mainly dealt with by the CoC Group with the application of the ‘Fair Taxation’ criterion; deplores the lack of coherence between the criteria on HTP applied to Member States and the tougher criteria, in particular on economic substance, applied to third-country jurisdictions in the listing process; notes that the influence of the Union to fight tax evasion and harmful tax practices worldwide depends on the example it sets at home;
Amendment 77 #
Motion for a resolution Paragraph 3 3. Welcomes the internal and external dimension of the work conducted by the CoC Group on HTP; notes that the external dimension of HTP is mainly dealt with by the CoC Group with the application of the ‘Fair Taxation’ criterion; deplores the lack of coherence between the weak criteria on HTP applied to Member States and the tougher criteria, in particular on economic substance, applied to third-country jurisdictions in the listing process;
Amendment 78 #
Motion for a resolution Paragraph 3 a (new) 3 a. Considers that Member States are entitled to design tax systems with regard to their own circumstances;
Amendment 79 #
Motion for a resolution Paragraph 3 b (new) 3 b. Warns against imposing additional obligations which go beyond what has been agreed internationally at OECD level, as gold-plating at the EU level risk weakening the competitiveness of EU countries and having a negative impact on employment and consumer welfare;
Amendment 8 #
Motion for a resolution Recital A A. whereas
Amendment 80 #
Motion for a resolution Paragraph 3 c (new) 3 c. Draws attention to the need to keep tax competition between Member States fair and transparent, and thus conducive to growth and employment;
Amendment 81 #
Motion for a resolution Paragraph 4 4.
Amendment 82 #
Motion for a resolution Paragraph 4 4. Recalls that a Forum on Harmful Tax Practices (FHTP) was created within the OECD in 1998 with the task of monitoring and reviewing tax practices, and with a focus on the characteristics of preferential tax regimes; highlights that the FHTP evaluations have a determinant impact on the qualification of harmful regimes in the EU listing process; calls the CoC to remain independent from the Forum on Harmful Tax Practices when assessing HTP;
Amendment 83 #
Motion for a resolution Paragraph 4 a (new) 4 a. Highlights the need to tax multinational corporations on the basis of a fair and effective formula for the allocation of taxing rights between countries; regrets in this regard that the Council did not agree on the CCTB and CCCTB proposals;
Amendment 84 #
Motion for a resolution Paragraph 4 a (new) 4 a. Welcomes the Commission's "Communication on Business Taxation for the 21st century" of 18th May 2021; urges the Commission to adjust its timeline of BEFIT legislative proposals similar to their commitment of reaching a global and consensus-based solution by mid-2021;
Amendment 85 #
Motion for a resolution Paragraph 4 a (new) 4 a. Notes the Commission's Communication on 18 May 2021 to introduise a minimum tax will reduce existing pressures on foreign direct investment (FDI)-receiving countries, including low-income and developing countries, to set tax rates below the minimum;
Amendment 86 #
Motion for a resolution Paragraph 5 5.
Amendment 87 #
Motion for a resolution Paragraph 5 5.
Amendment 88 #
Motion for a resolution Paragraph 5 5.
Amendment 89 #
Motion for a resolution Paragraph 5 5. Welcomes the proposed Pillar II reform of the OECD/G20 Inclusive Framework on BEPS (Inclusive Framework), which aims to address remaining BEPS challenges and to set out rules giving jurisdictions a right to tax back where other jurisdictions have not exercised their primary taxing rights or the payment is otherwise subject to low levels of effective taxation, to combat harmful tax practices and impose an effective tax rate28 ; notes that to effectively combat tax avoidance and harmful tax practices the effective tax rate needs to be set as close as the average statutory corporate income tax rate and be applied without exemptions and on a per country basis; _________________ 28 OECD/G20 Base Erosion and Profit Shifting Project, Tax Challenges Arising from Digitalisation – Report on Pillar One Blueprint: Inclusive Framework on BEPS, OECD Publishing, Paris, 2020, p. 12. Available at: https://www.oecd.org/tax/beps/tax- challenges-arising-from-digitalisation- report-on-pillar-two-blueprint.pdf
Amendment 9 #
Motion for a resolution Recital A A. whereas harmful tax practices (HTP) refer to
Amendment 90 #
5 a. Considers that the EU strategy with regard to harmful tax practices should be further developed to provide an even distribution of tax burden and support fragile sectors of the economy such as citizens and SMEs;
Amendment 91 #
Motion for a resolution Paragraph 5 b (new) 5 b. Considers that the EU should provide additional support to EU member states not having suficient fiscal capabilities in handling harmful tax practices and tax avoidance. The EU should actively fight against fiscal consolidation leading to tax avoidance;
Amendment 92 #
Motion for a resolution Paragraph 6 6.
Amendment 93 #
Motion for a resolution Paragraph 6 6.
Amendment 94 #
Motion for a resolution Paragraph 6 6. Welcomes the
Amendment 95 #
Motion for a resolution Paragraph 6 6. Welcomes the fact that the proposal put forward by the US Administration for ‘The Made in America Tax Plan’ could facilitate a deal on Pillar II by mid-2021; calls, therefore, the Commission to come forward with an impact assessment on the proposals and to prepare a non-agreement scenario, with concrete initiatives for an European approach; reminds that any agreement must be approved by all the States involved in the negotiations and calls the Member States to commit to a compromise as soon as possible, in order to find an international multilateral solution;
Amendment 96 #
Motion for a resolution Paragraph 6 6. Welcomes the fact that the proposal put forward by the US Administration for ‘The Made in America Tax Plan’ could facilitate a deal on Pillar II by mid-2021; but deplores the fact that the first announced rate of 21% for a minimum tax rate was recently changed to 15%, which could signal a less ambitious global compromise. Calls on the EU to advocate for a global minimum effective tax rate of at least 25%, in order for it to have a meaningful role in the fight against profit shifting;
Amendment 97 #
Motion for a resolution Paragraph 6 6. Welcomes the fact that the proposal put forward by the US Administration for ‘The Made in America Tax Plan’ could facilitate a deal on Pillar II by mid-2021; welcomes that the GILTI proposal includes a minimum effective tax rate of 21%, applied on a per country basis, without thresholds and exemptions; notes that ‘The Made in America Tax Plan’ includes a shift to more effective R&D investment incentives instead of profit- based incentives;
Amendment 98 #
Motion for a resolution Paragraph 6 6. Welcomes the fact that the proposal put forward by the US Administration for ‘The Made in America Tax Plan’ could facilitate a deal on Pillar II by mid-2021 and gathering more than 130 countries; highlights the US tax plan includes a minimum effective tax rate of 21% for Global intangible low-taxed income(GILTI) and a minimum effective tax rate of 15% for booked income, including US domestic income;
Amendment 99 #
Motion for a resolution Paragraph 6 6. Welcomes the fact that the proposal put forward by the US Administration for ‘The Made in America Tax Plan’ could facilitate a deal on Pillar II by mid-2021; calls for the European Union to quickly implement an effective minimum tax rate as soon as an agreement is reached at the OECD;
source: 693.613
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History
(these mark the time of scraping, not the official date of the change)
2023-08-03Show (2) Changes
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