2021/2074(INI) The impact of national tax reforms on the EU economy
Lead committee dossier:
Progress: Procedure completed
| Role | Committee | Rapporteur | Shadows |
|---|---|---|---|
| Lead | ECON |
FERBER Markus ( EPP)
|
FUGLSANG Niels ( S&D),
BOYER Gilles ( Renew),
GRUFFAT Claude ( Verts/ALE),
BECK Gunnar ( ID),
ZĪLE Roberts ( ECR),
GUSMÃO José ( GUE/NGL)
|
Lead committee dossier:
Legal Basis:
RoP 54
Legal Basis:
RoP 54Events
2022/06/13
EC - Commission response to text adopted in plenary
Documents
2022/02/15
EP - Results of vote in Parliament
Documents
2022/02/15
EP - Decision by Parliament
Details
The European Parliament adopted by 469 votes to 94, with 137 abstentions, a resolution on the impact of national tax reforms on the EU economy.
Although tax policy is largely the responsibility of the Member States, the single market requires harmonisation and coordination in tax policy-making in order to increase the integration of the single market and prevent base erosion.
(1) Impact on small and medium-sized enterprises (SMEs)
Members considered that tax policy fragmentation creates various obstacles for citizens and companies in the single market, particularly small and medium-sized enterprises (SMEs), including legal uncertainty, red tape, the risk of double taxation and difficulties claiming tax refunds.
The costs of compliance with tax obligations are estimated for large multinational companies to be around 2% of taxes paid, for SMEs this is estimated around 30%. Some Member States have developed schemes that would tax profits made in an international context at a lower rate than the national nominal rate, thus putting SMEs at a competitive disadvantage.
The resolution pointed out that differences in national tax regimes can act as barriers to SMEs trying to operate across borders, as SMEs have fewer resources than multinationals to devote to tax compliance and optimisation.
Members considered that harmonisation of the tax base, such as the common corporate tax base, could reduce compliance costs for SMEs operating in more than one Member State. They reiterated that taxing profits in the country where the economic activities take place will allow governments to offer a level playing field for their SMEs. They highlighted the need to tax corporations using a fair and effective formula for the allocation of taxing rights between countries and called on Members States to swiftly agree on an ambitious proposal for a European corporate tax rulebook .
The resolution also noted that many Member States and the EU have introduced dedicated regimes that favour SMEs . Members considered that such special treatment, if utilised extensively, while generally positive, could risk introducing further distortions and further possibilities of aggressive tax planning, and could further increase the overall complexity of the system. Member States are urged to design tax benefits for SMEs in a way that is consistent with the overall tax regime and does not encourage SMEs to stay small.
(2) Harmonisation and coordination of tax policies
Parliament welcomed that the EU has developed coordination mechanisms such as peer review procedures within the Code of Conduct Group (CoC) and country-specific recommendations in the context of the European Semester. It considered that both of these mechanisms need to be further improved.
Parliament noted the limits of the current decision-making process in the Council to meet legislative needs when it comes to promoting coordination between Member States and tackling harmful tax practices. It called for the full potential of the TFEU Treaty to be explored. It also stressed that the ideal level of coordination of tax policies to ensure maximum impact is the international arena, through the G20/OECD, recalling that EU tax proposals based on international agreements have always been more likely to be adopted by the Council.
The Commission and the Member States are called on to work together and ensure the transposition into EU law of the OECD/G20 Inclusive Framework agreement which suggests that multinational enterprises be subject to a 15 % effective tax rate.
(3) Recommendations and areas for reform
The resolution stressed that in areas of high importance for the functioning of the single market, such as taxation and the capital markets union, more harmonisation is warranted either through better Member State coordination or EU action. The reforms should focus on the following key areas:
Debt equity bias
Members deplored the debt equity bias in corporate taxation that allows for generous tax deductions on interest payments, while equity financing costs cannot be deducted in a similar manner, making debt financing relatively more attractive than equity financing. The debt equity bias might incentivise companies to take on too much debt.
Given that debt equity bias varies considerably between the Member States, Members consider that a common European approach would be preferable in order to avoid distortions within the single market.
Members also look forward to: (i) a Commission proposal which should aim to ensure a more consistent determination of tax residence within the single market and (ii) a legislative initiative proposal for the introduction of a common, standardised, EU-wide system for the reduction of withholding tax at source .
Competing marginal effective tax rates
The resolution noted that the marginal effective tax rate can be a key factor for companies making investment decisions. Given the considerable differences in marginal effective tax rates between Member States, Members called on Commission to investigate whether some Member States distort competition by artificially lowering their marginal effective tax rates, for example through accelerated depreciation schedules or by adjusting the tax deductibility of certain items, and to communicate its results to Parliament.
Tax incentives for research and development
While stressing that tax incentives for research and development comes with obvious benefits to society and the economy, Members are concerned that certain types of tax incentives, such as patent or intellectual property tax regimes, do little to increase spending on research and development and may in fact distort the single market by encouraging profit-shifting and aggressive tax planning.
Parliament called on the Commission to propose guidelines on tax incentives that are not distortive for the single market. It stressed that further harmonisation regarding tax incentives for research and development spending may be warranted.
Documents
2022/02/14
EP - Debate in Parliament
Documents
2021/12/14
EP - Committee report tabled for plenary
Details
The Economic and Monetary Affairs Committee adopted an own-initiative report by Markus FERBER (EPP, DE) on the impact of national tax reforms on the EU economy.
Although tax policy is largely the responsibility of the Member States, the single market requires harmonisation and coordination in tax policy-making in order to increase the integration of the single market and prevent base erosion.
(1) Impact on small and medium-sized enterprises (SMEs)
While the costs of compliance with tax obligations are estimated for large multinational companies to be around 2% of taxes paid, for SMEs this is estimated around 30%. Furthermore, the profits of multinational enterprises tend to be taxed less than those of equivalent domestic enterprises.
The report pointed out that differences in national tax regimes can act as barriers to SMEs trying to operate across borders, as SMEs have fewer resources than multinationals to devote to tax compliance and optimisation.
Members considered that harmonisation of the tax base , such as the common corporate tax base, could reduce compliance costs for SMEs operating in more than one Member State. They reiterate that taxing profits in the country where the economic activities take place would enable governments to offer a level playing field to their SMEs.
Members also stressed the need to tax companies using a fair and effective formula for allocating taxing rights between countries, taking into account factors such as the workforce and the existence of tangible assets. They called on Member States to rapidly agree on an ambitious proposal for a European corporate tax code.
The report noted that many Member States and the EU have introduced dedicated regimes that favour SMEs. Members considered that such special treatment, if utilised extensively, while generally positive, could risk introducing further distortions and further possibilities of aggressive tax planning, and could further increase the overall complexity of the system. Member States are urged to design tax benefits for SMEs in a way that is consistent with the overall tax regime and does not encourage SMEs to stay small.
(2) Harmonisation and coordination of tax policies
Members pointed out that the EU has developed coordination mechanisms such as peer review procedures within the Code of Conduct Group (CoC) and country-specific recommendations in the context of the European Semester. They considered that both of these mechanisms need to be further improved.
The report noted the limits of the current decision-making process in the Council to meet legislative needs when it comes to promoting coordination between Member States and tackling harmful tax practices. It called for the full potential of the TFEU Treaty to be explored . It also stressed that the ideal level of coordination of tax policies to ensure maximum impact is the international arena, through the G20/OECD, recalling that EU tax proposals based on international agreements have always been more likely to be adopted by the Council.
(3) Recommendations and areas for reform
The report stressed that in areas of high importance for the functioning of the single market, such as taxation and the capital markets union, more harmonisation is warranted either through better Member State coordination or EU action. The reforms should focus on the following key areas:
Debt equity bias
Members deplored the debt equity bias in corporate taxation that allows for generous tax deductions on interest payments, while equity financing costs cannot be deducted in a similar manner, making debt financing relatively more attractive than equity financing. They recalled that these incentives can be reduced either by allowing a further deduction of equity financing costs or by reducing the possibilities for interest deductions. They look forward to the Commission's proposal for a debt equity bias reduction allowance.
Competing marginal effective tax rates
The report noted that the marginal effective tax rate can be a key factor for companies making investment decisions. Given the considerable differences in marginal effective tax rates between Member States, Members called on Commission to investigate whether some Member States distort competition by artificially lowering their marginal effective tax rates, for example through accelerated depreciation schedules or by adjusting the tax deductibility of certain items, and to communicate its results to Parliament.
Tax incentives for research and development
While stressing that tax incentives for research and development comes with obvious benefits to society and the economy, Members are concerned that certain types of tax incentives, such as patent or intellectual property tax regimes, do little to increase spending on research and development and may in fact distort the single market by encouraging profit-shifting and aggressive tax planning.
Members called on the Commission to propose guidelines on tax incentives that are not distortive for the single market. They stressed that further harmonisation regarding tax incentives for research and development spending may be warranted.
EU taxation scoreboard
Noting the Commission’s ongoing work on an EU tax scoreboard, Members stressed that the scoreboard should contribute to the fight against harmful tax competition and take into account the considerable public revenue losses imposed by national tax policies that are facilitating tax avoidance. The tax scoreboard should be built as an instrument to help Member States perform sound and robust reforms on tax matters.
Documents
2021/12/06
EP - Vote in committee
2021/10/28
EP - Amendments tabled in committee
Documents
2021/09/13
EP - Committee draft report
Documents
2021/06/22
EP - FERBER Markus (EPP) appointed as rapporteur in ECON
2021/06/10
EP - Committee referral announced in Parliament
Documents
- Commission response to text adopted in plenary: SP(2022)192
- Results of vote in Parliament: Results of vote in Parliament
- Decision by Parliament: T9-0023/2022
- Debate in Parliament: Debate in Parliament
- Committee report tabled for plenary: A9-0348/2021
- Amendments tabled in committee: PE697.827
- Committee draft report: PE695.102
- Committee draft report: PE695.102
- Amendments tabled in committee: PE697.827
- Commission response to text adopted in plenary: SP(2022)192
Activities
- Danuta Maria HÜBNER
Plenary Speeches (1)
- Guido REIL
Plenary Speeches (1)
- László TRÓCSÁNYI
Plenary Speeches (1)
Votes
L'impact des réformes fiscales nationales sur l'économie de l'UE - Impact of national tax reforms on the EU economy - Auswirkungen der einzelstaatlichen Steuerreformen auf die Wirtschaft in der EU - A9-0348/2021 - Markus Ferber - Proposition de résolution (ensemble du texte) #
2022/02/15 Outcome: +: 469, 0: 137, -: 94
PPE
NI
The Left| Amendments | Dossier |
| 214 |
2021/2074(INI)
2021/10/28
ECON
214 amendments...
Amendment 1 #
Motion for a resolution Citation 3 a (new) — having regards to the Communication From The Commission To The European Parliament And The Council, 'An Action Plan For Fair And Simple Taxation Supporting The Recovery Strategy' COM(2020) 312 final,
Amendment 10 #
Motion for a resolution Citation 3 d (new) — having regard to the Commission report of September 2015, on Tax reforms in EU Member States 2015 - Tax policy challenges for economic growth and fiscal sustainability,
Amendment 100 #
Motion for a resolution Paragraph 5 5. Notes that many Member States as well as the EU have introduced dedicated regimes favouring SMEs such as special VAT rules in order to offset the higher effective tax rates and higher tax compliance costs for SMEs; stresses that such special treatment, if utilised extensively, while generally positive, could risk introducing further distortions and further increasing the overall complexity of the system; while stresses that tax competition is the main mechanism helping Member States to identify and close the loopholes and shortcomings responsible for tax evasion;
Amendment 101 #
5. Notes that many Member States as well as the EU have introduced dedicated regimes favouring SMEs such as special VAT rules in order to offset the higher effective tax rates and higher tax compliance costs for SMEs; stresses that such special treatment
Amendment 102 #
Motion for a resolution Paragraph 5 5. Notes that many Member States as well as the EU have introduced dedicated regimes favouring SMEs such as special VAT rules in order to offset the higher effective tax rates and higher tax compliance costs for SMEs; stresses that such special treatment
Amendment 103 #
Motion for a resolution Paragraph 5 5. Notes that many Member States as well as the EU have introduced dedicated regimes favouring SMEs such as special VAT rules in order to offset the higher effective tax rates and higher tax compliance costs for SMEs; stresses that such special treatment, while generally positive, could risk introducing further distortions, further possibilities of tax dodging and further increasing the overall complexity of the system;
Amendment 104 #
Motion for a resolution Paragraph 5 a (new) 5 a. Notes that MNEs are the economic entities benefiting the most from the economic advantages of the Single Market; considers it essential to restore fair competition between SMEs and MNEs and therefore requests the Commission to assess the feasibility of a Single Market Levy;
Amendment 105 #
Motion for a resolution Paragraph 5 a (new) 5 a. Calls on Member States to design tax benefits for SMEs in a way that is consistent with the overall tax regime and does not encourage SMEs to stay small;
Amendment 106 #
Motion for a resolution Paragraph 5 a (new) 5 a. Stresses that an effective tax system with low average tax rates is less vulnerable to tax evasion and tax optimisation;
Amendment 107 #
Motion for a resolution Paragraph 5 b (new) 5 b. Takes note that SMEs are often less able to absorb or finance losses than larger companies because of more limited cash flows; welcomes, in this regard, the Commission’s recommendation to Member States on the tax treatment of losses during the COVID-19 crisis of 18 May 2021 and calls on Members States to take these recommendations into consideration;
Amendment 109 #
Motion for a resolution Paragraph 5 a (new) 5 a. Observes that the common market in the EU, with the free movement of factors of production, and close economic relations with non-EU neighbours (including Norway, Switzerland, and the United Kingdom) has generated large trade, investment, and financial flows among European countries ; notes that this deep inter connectedness, without coordinated tax rules such as minimum rates or commonly defined tax bases, however, has raised the sensitivity of each country’s tax bases and rate to that of other countries, magnifying in particular corporate income tax spillovers;
Amendment 11 #
Motion for a resolution Citation 3 e (new) — having regards to the Code of Conduct Group's (Business Taxation) Overview of EU Member States' preferential tax regimes examined since the creation of the COCG in March 1998 (8602/1/20 REV 1),
Amendment 110 #
Motion for a resolution Paragraph 6 6.
Amendment 111 #
Motion for a resolution Paragraph 6 6. Notes that the EU has developed coordination mechanisms such as peer review procedures within the Code of Conduct Group and country-specific recommendations in the context of the European Semester; points out that the Commission has recommended to six Member States that they curb aggressive tax planning as part of the 2020 country- specific recommendations; ; welcomes the Commission’s integration of the country- specific recommendations to the assessment of the national recovery and resilience plans; calls on the Commission to make the country-specific recommendation regarding aggressive tax planning a regular feature of the European Semester and to further expand beyond corporate income taxation;
Amendment 112 #
Motion for a resolution Paragraph 6 6. Notes that the EU has developed coordination mechanisms such as peer review procedures within the Code of Conduct Group and country-specific recommendations in the context of the European Semester; points out that the Commission has recommended to six Member States that they curb aggressive tax planning as part of the 2020 country- specific recommendations; points out that there is a need for stronger cooperation between Member States in order to boost the role of fiscal policies as a tool for the EU's economic recovery;
Amendment 113 #
Motion for a resolution Paragraph 6 6. Notes that the EU has developed coordination mechanisms such as peer review procedures within the Code of Conduct Group and country-specific recommendations in the context of the European Semester;
Amendment 114 #
Motion for a resolution Paragraph 6 a (new) 6 a. Reminds that since 2011 the Directive on Administrative Cooperation (DAC) lays down the rules for cooperation between Member States’ tax authorities with the aim of ensuring the proper functioning of the single market; welcomes that since 2011 the scope of the Directive has been continuously widened to new domains in order to curb tax fraud and tax avoidance; welcomes the European Parliament’s implementation report adopted in September 2021 identifying shortcomings in the effective implementation of DAC by Member States and highlighting the need to strengthen the exchange of information between national tax authorities;
Amendment 115 #
Motion for a resolution Paragraph 6 a (new) 6 a. Recognises the positive impact of the Country Specific Recommendations in fostering needed tax reforms in those Member States that received recommendation on aggressive tax planning such as reforms on conditional withholding taxes on royalty and interest payments in case of abuse or payments to low-tax jurisdictions; regrets that some Member States have not yet,addressed the CSR on tax;
Amendment 116 #
Motion for a resolution Paragraph 6 a (new) 6 a. Is interested in knowing whether the Recovery and Resilience Facility contributes to better compliance and implementation of the country-specific- recommendations; invites the Commission to report on the impact of the Recovery and Resilience Facility on the implementation and of the country- specific recommendations;
Amendment 117 #
Motion for a resolution Paragraph 6 a (new) 6 a. Takes note of the EU’s role on indirect taxes to ensure the establishment and the functioning of the internal market and to avoid distortion of competition; notes, in this context, the existing limits of the special legislative procedure to realize these objectives;
Amendment 118 #
Motion for a resolution Paragraph 6 b (new) 6 b. Considers the CSR on tax a powerful tool; understands that in the Framework of the Resilience and Recovery plan, the Commission is also assessing how Member States intend to tackle aggressive tax planning; however regrets the disappearance of the assessment of Member States' tax features that can facilitate aggressive tax planning;
Amendment 119 #
Motion for a resolution Paragraph 6 b (new) 6 b. Deplores the fact that the Netherlands has delayed implementation of the country-specific-recommendations on the facilitation of aggressive tax planning and did not hand in their recovery and resilience plans to the Commission;
Amendment 12 #
Motion for a resolution Citation 3 e (new) — having regard to the OECD report, Tax Policy Reforms 2021, Special Edition on Tax Policy during the COVID-19 Pandemic,
Amendment 120 #
Motion for a resolution Paragraph 7 7. Highlights that the ideal level for tax policy coordination is on the international stage through the G20/OECD; notes that EU tax proposals based on international agreements have historically been more likely to be adopted by the Council; urges the Commission and Member States to work together and ensure the transposition into EU law of the Inclusive Framework agreement on the two Pillars as announced by the President of the Commission in its State of the Union Letter of Intent 2021; recognises that the economic integration of the EU requires more coordination than other economic areas; notes that when translating the BEPS 15 Action of the Base Erosion and Profit Shifting project from OECD/G20, the EU went further in adding Controlled Foreign Company Rules into the Anti-Tax Avoidance Directive;
Amendment 121 #
Motion for a resolution Paragraph 7 7. Highlights that the ideal level for tax policy coordination is on the international stage through the G20/OECD; stresses nevertheless that developing countries should be fully included in the negotiation process; notes that EU tax proposals based on international agreements have historically been more likely to be adopted by the Council; stresses, however, that neither OECD nor G20 have legislative authority, in this sense, calls on the Commission to make progresses by transposing the last results from the negotiations to EU law, and to be more ambitious by implementing a 25% minimum corporate tax rate;
Amendment 122 #
Motion for a resolution Paragraph 7 7. Highlights that the ideal level for tax policy coordination is on the international stage through, amongst others, the G20/OECD; notes that EU tax proposals based on international agreements have historically been more likely to be adopted by the Council
Amendment 123 #
Motion for a resolution Paragraph 7 7. Highlights that the ideal level for tax policy coordination is on the international stage through the G20/OECD; notes that EU tax proposals based on international agreements have historically been more likely to be adopted by the Council; recalls that the Commission announced, in its Communication on Business Taxation for the 21st Century, a proposal for a directive that will reflect the OECD Model Rules with the necessary adjustments for the implementation of Pillar II on minimum effective taxation;
Amendment 124 #
Motion for a resolution Paragraph 7 7. Highlights that, in order to maximise the impact, the ideal level for tax policy coordination is on the international stage through the G20/OECD;
Amendment 125 #
Motion for a resolution Paragraph 7 7. Highlights that the ideal level for tax policy coordination is on the international stage through the G20/OECD; notes that EU tax proposals based on international agreements have historically been more likely to be adopted by the Council; encourages, in that regard, Member States to push for similar international agreements that address the race to the bottom environment in capital gains taxes and personal income taxes for highly mobile individuals;
Amendment 126 #
Motion for a resolution Paragraph 7 7. Highlights that
Amendment 127 #
Motion for a resolution Paragraph 7 a (new) 7 a. Highlights the crucial role of cooperation among national tax administrations to coordinate better collection of revenue and fighting abusive tax practices; Reiterates, in this line, the recommendations from European Parliament resolution of 16 September 2021 on the implementation of the EU requirements for exchange of tax information: progress, lessons learnt and obstacles to overcome; more specifically: enlarging the scope of DAC framework to add items of income or non-financial assets, stressing the limited quality of the information exchanged, calling for stronger enforcement procedures at Member State level and an assessment of the effectiveness of their monitoring schemes;
Amendment 128 #
Motion for a resolution Paragraph 7 a (new) 7 a. Recalls that all existing directives in tax matters had to go through unanimity procedure in Council leading to weaker rules; also recalls that many of these instruments have undergone revisions such as the Parent Subsidiary directive; recalls as well that the revision of the Interest and Royalty directive or the definitive VAT regime is still blocked in Council; observes that as a result these EU instruments have not prevented a large tax gap and an aggressive tax competition between Member States; therefore concludes that the difficulties encountered in Council to deal with taxation challenges demonstrates the need to move to qualified majority in tax matters;
Amendment 129 #
Motion for a resolution Paragraph 7 a (new) 7 a. Highlights that in order to facilitate trade and increase legal certainty in the single market, the Commission, in close cooperation with Member States, should establish a Union VAT Web information portal for businesses;
Amendment 13 #
Motion for a resolution Citation 3 f (new) — having regard to the European Parliament Own-initiative Report on Reforming the EU policy on harmful tax practices (including the reform of the Code of Conduct Group), 2020/2258(INI),
Amendment 130 #
Motion for a resolution Paragraph 7 a (new) 7 a. Notes the withdrawal of the proposal for a Common Consolidated Corporate Tax Base; urges the Commission to put forward a detailed proposal of a single corporate tax rulebook for the EU in the framework of BEFIT;
Amendment 131 #
Motion for a resolution Paragraph 7 b (new) 7 b. Deeply regrets the fact that almost all Member States – with the exception of Finland and Sweden – have refused to grant Parliament access to the relevant data to assess the implementation of DAC provisions; deplores the fact that the Commission did not grant Parliament access to the relevant data in its possession; notes that this refusal is not consistent with calls for greater transparency and cooperation in tax matters;
Amendment 132 #
Motion for a resolution Paragraph 7 b (new) 7 b. Deplores that the procedure laid down in Article 116 of the Treaty on the Functioning of the European Union, under which Parliament and the Council act in accordance with the ordinary legislative procedure, inorder to act when harmful tax practices lead to market distortion within the Union, has never been used so far; believes that Article 116 TFEU can be used to set minimum standards and harmonize tax rules in the EU;
Amendment 133 #
Motion for a resolution Paragraph 7 b (new) 7 b. Welcomes 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 as major progress has already been achieved;
Amendment 134 #
Motion for a resolution Paragraph 7 c (new) 7 c. Welcomes the latest advances on the pCBCR, stressing the importance of transparent and standardized data on corporates' 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 EU member states and the countries listed in the EU’s list of non- cooperative jurisdictions, ruling out third countries that in facto behave as tax havens but are not yet listed; included in the text a “corporate-get-out-clause” allowing a reporting exemption for “commercially sensitive information”; and that is only to be applied to companies with an annual consolidated turnover above EUR 750 million, which excludes 85 - 90 per cent of multinationals;
Amendment 135 #
Motion for a resolution Paragraph 7 d (new) 7 d. Welcomes the Task Force on Tax Planning Practices in 2013 to follow up on public allegations of favourable tax treatment of certain companies (in particular in the form of tax rulings);
Amendment 136 #
Motion for a resolution Paragraph 8 8. Points out that in areas of high importance for the functioning of the single market, such as taxation, and the capital markets union, more harmonisation is warranted either through better Member State coordination or EU
Amendment 137 #
Motion for a resolution Paragraph 8 a (new) 8 a. Stresses that Member States still use various criteria to determine tax residence status, creating a risk of double taxation or double non-taxation; recalls in this regard the July 2020 Commission’s action plan announcing a Commission’s legislative proposal in 2022/2023 clarifying where taxpayers active cross- borders in the EU are to be considered residents for tax purposes; looks forward to this Commission’s proposal which should aim at ensuring a more consistent determination of tax residence within the Single Market;
Amendment 138 #
Motion for a resolution Paragraph 9 9. Notes that digitalisation and a heavy reliance on intangible assets that pose challenges to the current tax system warrant a high degree of policy coordination;
Amendment 139 #
Motion for a resolution Paragraph 9 9. Notes that digitalisation and a heavy reliance on intangible assets that pose challenges to the current tax system warrant a high degree of policy coordination;
Amendment 14 #
Motion for a resolution Citation 3 f (new) — having regards to its resolution of 7 October 2021 on reforming the EU policy on harmful tax practices (including the reform of the Code of Conduct Group),
Amendment 140 #
Motion for a resolution Paragraph 9 9. Notes that digitalisation and a heavy reliance on intangible assets that pose challenges to the current tax system warrant a high degree of policy
Amendment 141 #
Motion for a resolution Paragraph 9 9. Notes that digitalisation and a heavy reliance on intangible assets that pose challenges to the current tax system warrant a high degree of policy coordination; deplores the fact that some Member States have pressed ahead with the introduction of national digital taxes despite ongoing negotiations at EU and OECD levels; stresses that these national measures should be phased out following the implementation of an effective international solution, one which does not undermine the competitiveness of national and European markets or harm companies in the digital and other strategic sectors, especially SMEs;
Amendment 142 #
Motion for a resolution Paragraph 9 9. Notes that digitalisation and a heavy reliance on intangible assets that pose challenges to the current tax system warrant a high degree of policy coordination in establishing a level playing field and ensuring that digital companies are fairly contributing to the societies where they do business; deplores the fact that some Member States have pressed ahead with the introduction of national digital taxes despite ongoing negotiations at EU and OECD levels; stresses that these national measures should be phased out following the implementation of an effective international solution;
Amendment 143 #
Motion for a resolution Paragraph 9 9. Notes that digitalisation and a heavy reliance on intangible assets that pose challenges to the current tax system warrant a high degree of policy coordination
Amendment 144 #
Motion for a resolution Paragraph 9 9. Notes that digitalisation and a heavy reliance on intangible assets that pose challenges to the current tax system warrant a high degree of policy coordination;
Amendment 145 #
Motion for a resolution Paragraph 9 a (new) 9 a. Observes the current distortions of the single market due to an increasing and unregulated tax competition in the field of personal income, capital and wealthtaxation; notes the ongoing competition in the EU for high net-worth individuals through preferential regimes such as expatriate and investment regimes; also notes the competition for pensioners and so-called ‘digital nomads’; furthermore notes the large differences among Member States in the tax treatment of capital gains, inheritances and gifts leading to easily exploitable loopholes for companies and individuals; calls on the Commission to fully integrate these observations in the broader reflection taking place in 2022 and concluding in a Tax Symposium on the ‘EU tax mix on the road to 2050’; calls for greater alignment and administrative cooperation of capital gains taxation in the EU;
Amendment 146 #
Motion for a resolution Paragraph 9 a (new) 9 a. Welcomes the historic agreement reached within the OECD/G20 Inclusive Framework on the reform of the international tax system based on the two- pillar solution with the aim to ensure a fairer distribution of profits and taxing rights among countries with respect to the largest and most profitable multinational companies, and that Multinational Enterprises (MNEs) be subject to a minimum 15% tax rate; calls on the Commission, as soon as the OECD has developed its model rules, to publish the legislative proposals to implement the international agreement into EU law; calls on the Council to swiftly adopt such proposals to have it effective in 2023;
Amendment 147 #
Motion for a resolution Paragraph 9 a (new) 9 a. Recognizes the importance of the ongoing negotiations at G20 and OECD level; stresses, nevertheless, the progressive weakening of the initial intentions and the long-time taken; sees initiatives of national digital taxes introduced by some Member States as a legitimate interim solution to tax the digital economy, facilitating the collection of revenue;
Amendment 148 #
Motion for a resolution Paragraph 9 a (new) 9 a. deplores that differences in withholding tax and withholding tax reimbursement procedures remain considerable obstacle for further Capital Market Union integration; welcomes the Commission’s announcement to propose a legislative initiative for introducing a common, standardised, EU-wide system for withholding tax relief at source1a; _________________ 1aCapital markets union 2020 action plan: A capital markets union for people and businesses, Action 10: Alleviating the tax associated burden in cross-border investment.
Amendment 149 #
Motion for a resolution Paragraph 9 b (new) 9 b. Shows concern that the proposal on an EU-wide digital levy as a new own resource to help finance the NGEU will be withdrawn as a result of the international negotiations, possibly resulting in an extra future budgetary burden on the Member States;
Amendment 15 #
Motion for a resolution Citation 5 a (new) — having regard to the resolution of the European Parliament on the implementation of the EU requirements for exchange of tax information: progress, lessons learnt and obstacles to overcome (2020/2046(INI)),
Amendment 150 #
Motion for a resolution Paragraph 10 10.
Amendment 151 #
Motion for a resolution Paragraph 10 10. Deplores the debt equity bias in corporate taxation that allows for generous tax deductions on interest payments, while equity financing costs cannot be deducted in a similar manner; highlights the structural disadvantage facing companies that rely on equity financing,
Amendment 152 #
Motion for a resolution Paragraph 10 a (new) 10 a. Notes that a massive adherence by SME to capital markets is not a reality in the European Union and the banking sector remains the most common source of financing; notes that banking sector is easier to regulate and to align with other EU goals, such as the EU taxonomy; looks cautiously to how Capital Markets Union will be regulated; calls for further regulation of the banking system, especially on the links with the shadow banking;
Amendment 153 #
Motion for a resolution Paragraph 10 a (new) 10 a. Notes that to help this access to credit to small and medium companies, funds to guarantee the loans of these companies should be created to facilitate investments in the ecological transition. These funds can be provided by the EIB or by national public banks;
Amendment 154 #
Motion for a resolution Paragraph 10 b (new) 10 b. Takes note that in the latest Survey on the Access to Finance of Enterprises in the euro area by the European Central Bank, published in November 2020, points out that euro area SMEs reported that “difficulty in finding customers was the dominant concern for their business activity, while access to finance was considered to be among the least important obstacles”;
Amendment 155 #
Motion for a resolution Paragraph 11 11. Notes that debt equity bias varies considerably between the Member States;
Amendment 156 #
Motion for a resolution Paragraph 11 11. Notes that debt equity bias varies considerably between the Member States; welcomes the fact that some Member States have
Amendment 157 #
Motion for a resolution Paragraph 11 11. Notes that debt equity bias varies considerably between the Member States;
Amendment 158 #
Motion for a resolution Paragraph 12 Amendment 159 #
Motion for a resolution Paragraph 12 12.
Amendment 16 #
Motion for a resolution Citation 5 a (new) — having regard to the OECD Inclusive Framework agreementvon pillar 1 and pillar 2 as endorsed by the G20 Ministers of Finance on the 8thof October 2021,
Amendment 160 #
Motion for a resolution Paragraph 12 12. Looks forward to the Commission’s proposal for a debt equity bias reduction allowance5
Amendment 161 #
Motion for a resolution Paragraph 12 12. Looks forward to the Commission’s proposal for a debt equity bias reduction allowance5 in order to facilitate the equitisation of companies; _________________ 5Commission communication of 18 May 2021 on business taxation for the 21st century (COM(2021)0251).
Amendment 162 #
Motion for a resolution Paragraph 12 12. Looks forward to the Commission’s proposal for a debt equity bias reduction allowance5 in order to facilitate the equitisation of companies; _________________ 5Commission communication of 18 May 2021 on business taxation for the 21st century (COM(2021)0251).
Amendment 163 #
Motion for a resolution Paragraph 12 a (new) 12 a. Welcomes the implementation of Anti-Tax Avoidance Directive (ATAD) in 2016, and more specifically article 4, which contemplates a rule for limiting interest deduction; Calls on the Commission to design DEBRA in the same direction;
Amendment 164 #
Motion for a resolution Paragraph 12 b (new) 12 b. Regrets that the original Commission’s proposal for an EU-wide Financial Transactions Tax (FTT) was not approved in the Council and that only ten Member States are undergoing negotiations by enhanced cooperation; Stresses the relevance of this measure as it would generate tax revenue curb speculative transactions and foster financial stability; Stresses that, in order to be efficient in its goals, this proposal should have the broadest scope possible, covering derivatives, the “repo” market, “market making” activities, intra-group transactions, the OTC market, pension funds and government bonds;
Amendment 165 #
Motion for a resolution Paragraph 13 13. Notes that the effective marginal tax rate (EMTR)
Amendment 166 #
Motion for a resolution Paragraph 13 13. Notes that the effective marginal tax rate (EMTR) is often a decisive factor for corporations making investment decisions; notes that there is considerable variation in the EMTR across Member States; invites the Commission to look into whether some Member States are distorting competition by artificially lowering their EMTR, e.g. through accelerated depreciation schedules or adjusting the tax deductibility of certain items; highlights that, under Art. 116 TFEU, market distortions caused by national legal provisions can be eliminated through an ordinary legislative procedure;
Amendment 167 #
Motion for a resolution Paragraph 13 13. Notes that the effective marginal tax rate (EMTR) is often a decisive factor for corporations making investment decisions; notes that there is considerable variation in the EMTR across Member States; invites the Commission to look into whether some Member States are distorting competition by artificially lowering their EMTR, e.g. through accelerated depreciation schedules or adjusting the tax deductibility of certain items; notes that the EMTR do not reflect the impact of aggressive tax planning or of tax rulings and special tax regimes;
Amendment 168 #
Motion for a resolution Paragraph 13 13. Notes that the effective marginal tax rate (EMTR) is often
Amendment 169 #
Motion for a resolution Paragraph 13 a (new) 13 a. Notes that while tax rulings can be an important tool to establish legal clarity for companies, they also carry the potential for abuse through the granting of preferential tax treatment;
Amendment 17 #
Motion for a resolution Citation 5 b (new) — having regard to European Parliament’s report on the implementation of the EU requirements for exchange of tax information: progress, lessons learnt and obstacles to overcome (2020/2046(INI)),
Amendment 170 #
Motion for a resolution Paragraph 13 b (new) 13 b. Welcomes that the Commission is willing to apply its constitutional role to fight the distortion of competition by making use of competition law; deplores that several recent Commission decisions in high-profile competition cases in the area of taxation have been annulled by the Courts; calls on the European Commission to prepare their competition policy cases more thoroughly so that they can hold up in a court of law;
Amendment 171 #
Motion for a resolution Paragraph 14 14. Highlights that tax incentives for private research and development (e.g. via tax credits, enhanced allowances or adjusted depreciation schedules) can help to lift an economy’s overall spending towards research and development, which often comes with positive externalities;
Amendment 172 #
Motion for a resolution Paragraph 14 14. Highlights that tax incentives applied in fiscally responsible manner for private research and development (e.g. via tax credits, enhanced allowances or adjusted depreciation schedules) can help to lift an economy’s overall spending towards research and development, which often comes with positive externalities; is concerned, however, that certain types of tax incentives such as patent box / intellectual property box regimes do little to increase research and development spending and may actually distort the single market and social cohesion particularly if incentives for research and development become more centralised which leads to even greater distortion amongst Member States;
Amendment 173 #
Motion for a resolution Paragraph 14 14. Highlights that tax incentives for private research and development (e.g. via tax credits, enhanced allowances or adjusted depreciation schedules) can help to lift an economy’s overall spending towards research and development, which often comes with positive externalities; is concerned, however, that certain types of tax incentives such as patent box / intellectual property box regimes do little to increase research and development spending and may actually distort the single market; recommends incentives that target input of innovation rather than output, meaning incentives that are costs- based and not profit-based;
Amendment 174 #
Motion for a resolution Paragraph 14 14. Highlights that tax incentives for private research and development (e.g. via tax credits, enhanced allowances or adjusted depreciation schedules) can help to lift an economy’s overall spending towards research and development, which often comes with positive externalities; the logic of tax incentives applies to European philanthropy as well that proved very useful since the Corona crisis; is concerned, however, that certain types of tax incentives such as patent box / intellectual property box regimes do little to increase research and development spending and may actually distort the single market;
Amendment 175 #
Motion for a resolution Paragraph 14 14. Highlights that tax incentives for private research and development (e.g. via tax credits, enhanced allowances or adjusted depreciation schedules) can help
Amendment 176 #
Motion for a resolution Paragraph 14 14.
Amendment 177 #
Motion for a resolution Paragraph 14 a (new) 14 a. Observes that some Member States use tax incentives to attract highly skilled or digital migrants could potentially; is concerned, that certain types of tax incentives in the personal income tax spheres, such as a migration allowance, temporary income tax break or reduction, may distort the single market, constitute a beggar-thy-neighbour policy and increase inequality between mobile and not so mobile workers; invites the Commission to look into whether tax incentives of Member States aimed at attracting workforce distort the single market or have other negative effects;
Amendment 178 #
Motion for a resolution Paragraph 15 15. Stresses that further harmonisation regarding tax incentives for research and development spending may be warranted; notes that that this was part of the Commission’s initial common corporate tax base proposal; deplores the fact that the topic was not addressed in the recent communication on business taxation for the 21st century; demands the Commission to propose guidelines on tax incentives that are not distortive for the Single Market, notably by favouring incentives that are cost-based, limited in time, regularly assessed, and repealed in case of no positive impact, limited in geographical scope and rather partial than full exemptions;
Amendment 179 #
Motion for a resolution Paragraph 15 15. Stresses that further harmonisation regarding tax incentives for research and development spending may be warranted; notes that that this was part of the Commission’s initial common corporate tax base proposal; deplores the fact that the topic was not addressed in the recent communication on business taxation for the 21st century; notes that tax incentives should aim at attracting investments in the real economy and therefore be expenditure based instead of profit based;
Amendment 18 #
Motion for a resolution Citation 5 b (new) — having regard to the OECD report of 19 May 2020 entitled ‘Tax and Fiscal Policy in Response to the Coronavirus Crisis: Strengthening Confidence and Resilience’,
Amendment 180 #
Motion for a resolution Paragraph 15 a (new) Amendment 181 #
Motion for a resolution Paragraph 15 a (new) 15 a. Notes that an important part of budgetary capacity is channeled through tax incentives in the form of exemptions, deductions, credits, deferrals and reduced tax rates3a; calls on the Commission to provide an assessment of all ineffective tax incentives and subsidies in particular those harmful to the environment and leading to negative economic distortions; calls on the Commission to establish a screening framework for tax incentives in the EU and oblige member states to publish the fiscal costs of tax incentives; calls on Member States to perform annual, detailed and public cost-benefit analyses of each tax provision; _________________ 3aThe tax-expenditure-to-GDP ratio is on average 4.5 percentagepoints in the EU; https://www.cepweb.org/reforming-tax- expenditures/;IMF, ‘Tax Policy for InclusiveGrowth after the Pandemic’, 16 December 2020, https://www.imf.org/en/Publications/SPR OLLs/covid19-special-notes#fiscal
Amendment 182 #
Motion for a resolution Paragraph 15 a (new) 15 a. Stresses that research conducted by the European Trade Union Institute5a shows that a general trend for the last years was that an increasing share of net profits was not translated into new private investment projects but rather being distributed as dividends; Calls for Member States to consider adopting new revenue measures such as raising progressive taxes on more affluent individuals and those relatively less affected by the crisis such as suggested by IMF5b;this could include increasing tax rates on higher income brackets, high-end property, capital gains, wealth or high- end luxury goods; _________________ 5aMatthieu Méaulle: Chapter 3 - Profit, investment and inequality: a preliminary view in https://www.etui.org/fr/publications/livres/ the-future-of-europe 5b IMF October 2020 World Economic Outlook - A Long and Difficult Ascent
Amendment 183 #
Motion for a resolution Paragraph 15 a (new) 15 a. Calls on the Member States to compromise on a strong, comprehensible and ambitious reform on indirect taxation, mainly on the Value Added Tax (VAT); stresses that reducing complexity and bureaucracy and properly address tax fraud and evasion on VAT is essential to preserve the integrity of the internal market;
Amendment 184 #
Motion for a resolution Paragraph 15 a (new) 15 a Welcomes the fact that tax competition in Europe has been able to influence the lowering of corporate tax rates, bringing the European average corporate tax rate below the OECD average1 a; _________________ 1aIMF report, Taxing Multinationals in Europe, 2021:
Amendment 185 #
Motion for a resolution Paragraph 15 a (new) 15 a. Considers that tax certainty would be reinforced if Member States had a common understanding of what tax incentives are not distortive; calls the Commission to issue guidelines on tax incentives that are not distortive for the Single Market;
Amendment 186 #
Motion for a resolution Paragraph 15 a (new) 15 a. Calls on Member States to continue reforming tax administrations, speed up digitalisation and start implementing strategic approaches to support SMEs with tax compliance as well as to identify opportunities for burden reductions;
Amendment 187 #
Motion for a resolution Paragraph 15 b (new) 15 b. Reminds that the Commission stated in a communication published on 27th May 2021 that : "Companies that draw huge benefits from the EU single market and will survive the crisis, also thanks to direct and indirect EU and national support, could contribute to rebuilding it in the recovery phase. This could include an own resource based on operations of enterprises which, depending on its design, could yield around EUR 10 billion annually"6a;
Amendment 188 #
Motion for a resolution Paragraph 15 b (new) 15 b. Calls on Member States to perform sound and robust reforms on the complexity of tax systems, with the aim to reduce bureaucracy, the administrative burden and the compliance costs; recalls that there is high added value on european cooperation on this matter and on the exchange of best practices between tax administrations;
Amendment 189 #
Motion for a resolution Paragraph 15 b (new) 15 b. Calls on Member States to make better use of the EU Fiscalis programme in order to improve cooperation between tax administrations in their reform efforts; calls in this regard on the Commission to establish an Erasmus exchange programme for tax officers in order to encourage the take-up of best practices;
Amendment 19 #
Motion for a resolution Citation 5 c (new) — having regard to the Commission’s action plan for fair and simple taxation supporting the recovery strategy (COM(2020) 312 final),
Amendment 190 #
Motion for a resolution Paragraph 15 b (new) 15 b. Asks the Commission to follow up and monitor new national tax reforms or measures implemented as a result of the pandemic to sustain the economy, especially those measures that were not temporary;
Amendment 191 #
Motion for a resolution Paragraph 15 b (new) 15 b. Recalls on the Commission and the Member States to carry out regular impact assessments of fiscal policies from a gender equality, geographic, and socio- economic perspective;
Amendment 192 #
Motion for a resolution Paragraph 15 c (new) 15 c. 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 193 #
Motion for a resolution Paragraph 15 c (new) 15 c. Stands for high standards of respect for taxpayers rights, especially on privacy and data protection, in any political and legislative process regarding taxation;
Amendment 194 #
Motion for a resolution Paragraph 15 d (new) 15 d. Recalls that the european companies, especially Small and Medium Enterprises, are the main enhancers of economic growth and job creation; calls on Member States to perform reforms on taxation that significantly reduce the compliance costs for companies, simplifying procedures and eliminating the excess of bureaucracy; underlines that transparency rules are essential to guarantee high standards of compliance and combat tax fraud and evasion, but these rules must comprehend the preservation of european companies competitiveness; recalls that labour costs are significantly high in some Member States and the companies must be able to employ workers without excessive costs that can deter investment strategies;
Amendment 195 #
Motion for a resolution Paragraph 15 d (new) 15 d. Recalls that budgetary cuts in tax administrations harm States’ capacity to fight against tax dodging and have a negative impact on their tax revenues;
Amendment 196 #
Motion for a resolution Paragraph 15 e (new) 15 e. Stresses that corporate tax avoidance is possible due to free movements of capital, allowing companies to reallocate their gains and increasing the room for double non-taxation; welcomes that measures are being taken to prevent these practices when it comes to third countries, but regrets their scope doesn’t apply to the European Single Market;
Amendment 197 #
Motion for a resolution Paragraph 15 f (new) 15 f. Highlights that Member States can take legitimate countermeasures to protect their tax bases, such as the non- deductibility or limited deductibility of costs (interests, royalties and services payments), withholding measures, the limitation of participation exemptions and special documentation requirements; Notes that ATAD represents a step forward but stresses that it stills encompasses loopholes that could be explored for harmful tax practices; Calls on the Commission to further develop legislation in the same direction;
Amendment 198 #
Motion for a resolution Paragraph 15 g (new) 15 g. Calls the Commission to follow-up the intention mentioned in the communication Business Taxation for the 21st Century of going further on the fight against abusive use of shell companies; calls for the definition of substance requirements to assess legal entities and to further banning them if those requirements aren’t met;
Amendment 199 #
Motion for a resolution Paragraph 15 h (new) 15 h. Welcomes the recommendation of Corporate Europe Observatory to fight corporate lobbying in tax policy decision process by implementing measures such as not allowing big accounting companies to receive public contracts for tax-related studies and impact assessments, ending privileged access, and implementing tougher rules regarding the revolving door between tax intermediaries and the European institutions, including on secondments and internships;
Amendment 2 #
Motion for a resolution Citation 3 a (new) — having regard to the Commission communication, of 15 July 2020, an action plan for fair and simple taxation supporting the recovery strategy, COM(2020) 312,
Amendment 20 #
Motion for a resolution Citation 5 c (new) — having regard to the IMF policy paper of 25 May2021 entitled ‘Taxing Multinationals in Europe’,
Amendment 200 #
Motion for a resolution Paragraph 15 i (new) 15 i. Calls on Member States to study better options for environmental taxes and calls on the Commission to issued guidelines on how to design them; Stresses this measures should be accompanied by regulatory requirements and public investment to assure green alternatives;
Amendment 201 #
Motion for a resolution Paragraph 15 j (new) 15 j. Welcomes that the revision of the Energy Tax Directive focus on setting higher minimum taxes for fossil fuels at national level;
Amendment 202 #
Motion for a resolution Paragraph 15 k (new) 15 k. Calls on the Commission to study the possibility of creating an allowance for tax deductibility for companies according to the same logic as taxonomy; Highlights that the European Union should consider progressive environmental taxes, based on the carbon consumption, as serious options for a fair and effective environmental taxation;
Amendment 203 #
Motion for a resolution Paragraph 15 l (new) 15 l. Highlights that the current global tax system is outdated, and the arm’s length principle applied to transfer prices no longer fits the globalized reality; Supports the implementation of an apportioned formula to define tax rights among jurisdictions for cross-border economic activity; Calls on the Commission to continue the proposal for a for a common (consolidated) corporate tax base (C(C)CTB)); Looks forward for more details on the design of ‘BEFIT - Business in Europe: Framework for Income Taxation’;
Amendment 204 #
Motion for a resolution Paragraph 16 16.
Amendment 205 #
Motion for a resolution Paragraph 16 16.
Amendment 206 #
Motion for a resolution Paragraph 16 16. Takes note of the Commission’s ongoing work on an EU taxation scoreboard
Amendment 207 #
Motion for a resolution Paragraph 16 – point a (new) (a) Suggests that the EU Taxation scoreboard should assess Member States’ tax practices according to a common set of objective criteria, such criteria should at least include : (a) the existing criteria used by the code of conduct group on business taxation;
Amendment 208 #
Motion for a resolution Paragraph 16 – point b (new) (b) the criteria used to list third country jurisdictions as part of the EU list of non-cooperative jurisdictions;
Amendment 209 #
Motion for a resolution Paragraph 16 – point c (new) (c) the past and ongoing infringement procedures launched against Member States for lack of conformity or lack of implementation of European legislation on tax and money laundering matters;
Amendment 21 #
Motion for a resolution Citation 5 d (new) — having regard to its resolution of 15 January 2019 on gender equality and taxation policies in the EU,
Amendment 210 #
Motion for a resolution Paragraph 16 – point d (new) (d) some criteria from the Commission’s 2016 scoreboard prepared for third countries (in the context of the establishment of the EU list of non- cooperative jurisdictions), including for examples criteria on financial activity (levels of financial services exports, total FDIs, statistics on foreign affiliates and specific financial income flows) or on stability factors (governance indicators, corruption levels);
Amendment 211 #
Motion for a resolution Paragraph 16 – point e (new) (e) economic indicators used by the Commission in its study on aggressive tax planning in2017 including tax treaties, interests and royalties payments etc;
Amendment 212 #
Motion for a resolution Paragraph 16 – point f (new) (f) an analysis of the tax mix per Member States;
Amendment 213 #
Motion for a resolution Paragraph 16 – point g (new) (g) spillover analysis of Member States tax policies and tax mix;
Amendment 214 #
Motion for a resolution Paragraph 16 a (new) 16 a. Understands that this Tax Scoreboard must be build as an instrument to help Member States on performing sound and robust reforms on tax matters; rejects the idea of the use of this scoreboard to shame specific Member States; stands for a strong cooperation with current european platforms to build this scoreboard; understands that this new instrument can be useful for the European Semester process and, specifically, for the country specific recommendations;
Amendment 22 #
Motion for a resolution Citation 5 e (new) — having regard to the Commission survey of 2020 entitled ‘Tax policies in the European Union’,
Amendment 23 #
Motion for a resolution Citation 5 g (new) — having regard to the European Parliament resolution of 21 October 2021 entitled ‘Pandora Papers: implications for the efforts to combat money laundering, tax evasion and tax avoidance’,
Amendment 24 #
Motion for a resolution Recital A A. whereas the issue of harmful tax practices
Amendment 25 #
Motion for a resolution Recital A A. whereas the
Amendment 26 #
Motion for a resolution Recital A a (new) A a. whereas the short term effects of the COVID-19 pandemic and long term structural transformation given demographic trends, digitalisation, and the transition towards a less carbon- intensive economic model have impacted Member States’ choices regarding the design of future tax policies;
Amendment 27 #
Motion for a resolution Recital A a (new) A a. whereas Parliament fully respects the principle of national tax sovereignty;
Amendment 28 #
B. whereas although tax policy largely remains a Member State responsibility,
Amendment 29 #
Motion for a resolution Recital B B. whereas although tax policy
Amendment 3 #
Motion for a resolution Citation 3 b (new) Amendment 30 #
B. whereas although tax policy largely remains a Member State responsibility, the single market requires
Amendment 31 #
Motion for a resolution Recital B B. whereas although tax policy largely remains a Member State responsibility, the single market requires a minimum degree of coordination in setting tax policy1
Amendment 32 #
Motion for a resolution Recital B B. whereas
Amendment 33 #
Motion for a resolution Recital B B. whereas although tax policy largely remains a Member State responsibility, the single market requires
Amendment 34 #
Motion for a resolution Recital B a (new) Amendment 35 #
Motion for a resolution Recital C C. whereas tax policy fragmentation creates various obstacles for companies and citizens in the single market, including legal uncertainty, red tape, the risk of double taxation and difficulties claiming tax refunds; whereas these obstacles discourage cross-border economic activity in the single market; whereas policy fragmentation also creates risks for tax authorities such as double non-taxation and arbitrage possibilities (such as aggressive tax planning); whereas some tax loopholes between Member States legislations, or between Member States and third countries, have been exploited as tax avoidance schemes;
Amendment 36 #
Motion for a resolution Recital C C. whereas
Amendment 37 #
Motion for a resolution Recital C C. whereas tax policy fragmentation creates various obstacles for c
Amendment 38 #
Motion for a resolution Recital C C. whereas tax policy fragmentation creates various obstacles for companies and citizens in the single market, including legal uncertainty, red tape, the risk of double taxation and difficulties claiming tax refunds; whereas these obstacles discourage cross-border economic activity in the single market; whereas policy fragmentation also creates risks for digital administration in the field of taxation and tax authorities such as double non-taxation and arbitrage possibilities (such as tax planning);
Amendment 39 #
Motion for a resolution Recital C C. whereas tax policy fragmentation creates various obstacles for companies and citizens in the single market, including legal uncertainty, red tape, the risk of double taxation and difficulties claiming tax refunds; whereas these obstacles discourage cross-border economic activity
Amendment 4 #
Motion for a resolution Citation 3 c (new) — having regard to the Commission communication of 18 May 2021, Business Taxation for the 21st Century, COM(2021) 251,
Amendment 40 #
Motion for a resolution Recital C C. whereas tax policy fragmentation can create
Amendment 41 #
Motion for a resolution Recital C a (new) C a. whereas ordinary citizens and entrepreneurs are particularly affected by the complexities of the tax system, taking into account their limited resources compared to those of multinational enterprises (MNEs);
Amendment 42 #
Motion for a resolution Recital D D. whereas
Amendment 43 #
Motion for a resolution Recital D D. whereas within the EU’s social market economy, adequate tax levels and simple and clear tax laws should not distort economic actors’ decision-making; whereas sound tax policies should support the
Amendment 44 #
Motion for a resolution Recital D D. whereas within the EU’s social market economy, adequate tax levels and simple and clear tax laws should
Amendment 45 #
Motion for a resolution Recital D a (new) D a. whereas tax competition in Europe appears to have influenced the decline in CIT rates that has brought the average European CIT rate below the average rate in OECD countries1a;whereas according to the Commission’s Annual Report on Taxation 2021, an estimated EUR 36-37 billion of corporate income tax (CIT) revenue are lost per year due to tax avoidance in the EU; _________________ 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 46 #
Motion for a resolution Recital D a (new) D a. whereas the economic recovery and the challenges regarding climate crisis, the ecological transition, the digitization of the economy involve very profound changes and increase the need to mobilise more resources and re- evaluate the current taxation policies, in particular the many loopholes embedded in complex national taxation polices, so that this transition is fair;
Amendment 47 #
Motion for a resolution Recital D a (new) D a. Whereas fiscal measures should not hinder private initiatives that generate economic growth, revive countries' economies and promote job creation in the EU;
Amendment 48 #
Motion for a resolution Recital D a (new) D a. whereas tax competition particulary for Member States which have lower levels of accumulated wealth or quality of life is the main factor to contribute to strengthening their economic and social cohesion;
Amendment 49 #
Motion for a resolution Recital D a (new) D a. whereas the weighted average statutory corporate income tax rate in OECD countries has declined from 46.52 % in 1980 to 25.85 % in 2020, representing a 44 % reduction in the past 40 years;
Amendment 5 #
Motion for a resolution Citation 5 a (new) — having regard to the Commission communication of 18 May 2021 on Business taxation for the 21st century,
Amendment 50 #
Motion for a resolution Recital D a (new) D a. whereas as efficient tax systems are marked by being transparent, easy to comply with and generating consistent tax revenue;
Amendment 51 #
Motion for a resolution Recital D b (new) D b. whereas independent research2a 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; _________________ 2aThomas Tørsløv, Ludvig Wier and Gabriel Zucman, The Missing Profits of Nations, Working Paper, April 2020, available from https://missingprofits.world/
Amendment 52 #
Motion for a resolution Recital E E. whereas the overall level of taxation differs considerably between Member States, as demonstrated by the fact that the tax-to-GDP ratio varied between 22.1 %
Amendment 53 #
Motion for a resolution Recital E E. whereas the overall level of taxation differs considerably between Member States, as demonstrated by the fact that the tax-to-GDP ratio varied between 22.1 % in Ireland and 46.1 % in Denmark in 20192 ;
Amendment 54 #
Motion for a resolution Recital E E. whereas the overall level of taxation (understood as taxes and compulsory actual social contributions) differs considerably between Member States, as demonstrated by the fact that the tax-to-GDP ratio varied between 22.1 % in Ireland and 46.1 % in Denmark in 20192 ; whereas on aggregate, the tax burden in the EU (40.1 %) is high
Amendment 55 #
Motion for a resolution Recital E a (new) E a. whereas international tax competition leads to suboptimal global welfare outcomes because of inefficiently low tax rates as each country attempts to make its tax system more attractive than those of others2a;whereas competition for foreign direct investment and real economic activities should therefore focus less on taxation and more on true value drivers such as good infrastructure, high levels of education, available workforce, legal certainty, independent judiciary, innovation, research and development, development of SMEs, and quality healthcare for which tax revenues are needed; _________________ 2a IMFreport, Taxing Multinationals in Europe, 2021 ;
Amendment 56 #
Motion for a resolution Recital E a (new) E a. whereas some MNEs have market values above Member States’ GDP and are thus as economically resourceful as some Member States;
Amendment 57 #
Motion for a resolution Recital E b (new) E b. whereas many business models do not require physical infrastructure in order to carry out transactions with customers and make profits, allowing some multinational digital companies to pay taxes of close to zero on their revenue made in the EU; whereas these companies have a massive impact on EU consumers and the internal market but contribute close to nothing to Member States' public revenue;
Amendment 58 #
Motion for a resolution Recital E c (new) E c. whereas the OECD/G20 Inclusive Framework on BEPS agreed on a two- pillar reform of the international tax system to address the challenges arising from the digitalisation of the economy, including a minimum effective corporate tax rate of 15 %;
Amendment 59 #
Motion for a resolution Recital F F. whereas during the pandemic, many countries resorted to
Amendment 6 #
Motion for a resolution Citation 5 f (new) Amendment 60 #
Motion for a resolution Recital F a (new) Amendment 61 #
Motion for a resolution Recital F a (new) F a. whereas regressive changes in the taxation of labour, corporations, consumption and wealth, observable in recent decades across the Member States, have resulted in a weakening of the redistributive power of tax systems and contributed to the trend in rising income inequality; whereas this structural change in taxation has shifted the tax burden towards low-income groups;
Amendment 62 #
Motion for a resolution Recital F a (new) F a. whereas the economic recovery effort must be enhanced by reforms on taxation that preserves taxpayers rights, reduces bureaucracy and aim to reduce the tax burden both on individuals and companies;
Amendment 63 #
Motion for a resolution Recital F a (new) F a. whereas growth-oriented tax reforms shift the tax burden away from income and labour taxes towards consumption and property taxes and aim to broaden the tax base while lowering tax rates;
Amendment 64 #
Motion for a resolution Recital F a (new) F a. whereas possible aggressive tax planning should be addressed in the countries’ Recovery and Resilience plans that have received country-specific recommendations on this issue;
Amendment 65 #
Motion for a resolution Recital F b (new) Amendment 66 #
Motion for a resolution Recital F c (new) F c. whereas in aggregate, the composition of the tax mix (tax on labour, consumption, capital, corporate income) in the EU has remained broadly stable in the 2004-2019 period, while the overall level of tax revenues has slightly increased1a; _________________ 1aEU Annual Report on Taxation 2021 p. 28
Amendment 67 #
Motion for a resolution Recital F d (new) F d. whereas the composition of the tax mix (relative shares of labour, consumption, capital and other taxes) varies significantly in the EU with some Member States having a more growth- friendly tax mix than others;
Amendment 68 #
Motion for a resolution Recital F e (new) F e. whereas a shift towards consumption-based taxes does not necessarily make the tax system more regressive;
Amendment 69 #
Motion for a resolution Paragraph 1 1. Recalls that Member States are free to decide on their own economic policies and in particular their own tax policies
Amendment 7 #
Motion for a resolution Citation 3 b (new) — having regard to the Commission communication of 24 September 2020, A Capital Markets Union for people and businesses-new action plan, COM(2020) 590,
Amendment 70 #
Motion for a resolution Paragraph 1 1. Recalls that Member States are free to decide on their own economic policies which can lead to policy fragmentation in the field of taxation and an un-level playing field within the Union and in particular their own tax policies; recalls, however, that Member States must exercise this competence consistently with Union law thereby allowing for fair competition and avoiding any distortion of the EU single market;
Amendment 71 #
Motion for a resolution Paragraph 1 1. Recalls that Member States are free to decide on their own economic policies and in particular their own tax policies; recalls, however, that
Amendment 72 #
Motion for a resolution Paragraph 1 1. Recalls that Member States are free to decide on their own economic policies and in particular their own tax policies; emphasises that it logically follows that decisions in the Council regarding tax matters require unanimity; recalls, however, that Member States must exercise this competence consistently with Union law;
Amendment 73 #
Motion for a resolution Paragraph 1 1. Recalls that Member States are free to decide on their own economic policies and in particular their own tax policies; recalls, however, that Member States must exercise this competence consistently with Union law; Reminds about the existence of the Art. 116 TFEU;
Amendment 74 #
Motion for a resolution Paragraph 1 a (new) 1 a. Highlights the non-binding nature of the Code of Conduct and that the report of 21 July 2021 on reforming the EU policy on harmful tax practices (including the reform of the Code of Conduct Group) asked for it to become binding; 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, while in comparison, EU member states are responsible for 36 percent3a; _________________ 3aThe State of Tax Justice 2020 - Tax Justice Network
Amendment 75 #
Motion for a resolution Paragraph 1 a (new) 1 a. Calls on the Member States to perform reforms on tax systems, taking advantage of the opportunities that come from the impact of european instruments that aim to support the economic recovery; stresses that these reforms must respect the european fiscal framework; recalls that these reforms are performed in full respect of national competences on tax matters, but a strong coordination between Member States results in significant added-value;
Amendment 76 #
Motion for a resolution Paragraph 1 a (new) 1a Recalls that free tax competition between EU Member States must be coordinated in order to facilitate and encourage cross-border operations by individuals and companies, and to make the EU an attractive market for international investment both at national level in each Member State and in the Union as a whole;
Amendment 77 #
Motion for a resolution Paragraph 1 b (new) 1 b. Stresses that the design of taxation policies should take into account how it impacts in different social groups, especially for low-income earners and woman; Reiterates, in this context, the points from European Parliament resolution of 15 January 2019 on gender equality and taxation policies in the EU; Calls on the Member States not to reduce the progressive nature of their personal income tax systems, for example by attempting to simplify personal income taxation;
Amendment 78 #
Motion for a resolution Paragraph 1 b (new) 1b Recalls that harmful tax practices can come in many guises and also encompass very high effective tax rate policies; stresses that the notion of fair tax regimes does not necessarily mean raising taxes across the board; points out that the impacts on the internal market of both extremes should be considered as market distortions;
Amendment 79 #
Motion for a resolution Paragraph 1 c (new) 1 c. Notes the current decision making process in the Council has proved inefficient in responding to the legislative needs to foster coordination among Member States and fight harmful tax practices; call for all possibilities offered by the TFEU to be explored; recalls that the procedure laid down in Article 116 TFEU can be applied when harmful tax practices are distorting the condition of competition in the internal market and that this Treaty provision does not alter the distribution of competences between the Union and the Member States;
Amendment 8 #
Motion for a resolution Citation 3 c (new) — having regards to country-specific recommendations and Commission’s assessments of the substance of the recovery and resilience plans in the framework of the European Semester and the Recovery and Resilience Facility,
Amendment 80 #
Motion for a resolution Paragraph 1 c (new) 1c Takes the view that countries' tax policies should be geared towards making businesses more competitive, encouraging private investment, generating more jobs and ensuring that states continue to raise revenues so as to be able to finance their essential functions and sustainable economic and social growth over time;
Amendment 81 #
Motion for a resolution Paragraph 1 d (new) 1 d. 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 82 #
Motion for a resolution Paragraph 1 e (new) 1 e. Underlines that unfair and regressive taxes such as VAT show an upward trend in the European 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 83 #
Motion for a resolution Paragraph 1 f (new) 1 f. Regrets that the Commission seems to put more efforts on monitoring and reducing public spending included in the Member States’ recovery plans than on setting up sufficient own resources to finance the recovery plan;
Amendment 84 #
Motion for a resolution Paragraph 2 2. Notes that the estimated tax compliance costs for large companies (MNEs) amount to about 2 % of taxes paid, while for small and medium-sized enterprises (SMEs) the estimate is about 30 % of taxes paid4 ; notes further that empirical evidence suggests that MNEs’ profits tend to be taxed less than profits of domestic peers, reflecting profit shifting from high- to low-tax affiliates ; _________________ 4 Commission Communication of 15 July 2020 on an action plan for fair and simple taxation supporting the recovery strategy, p. 6 (COM(2020)0312).
Amendment 85 #
Motion for a resolution Paragraph 3 3. Highlights that differences in national tax regimes present obstacles to SMEs trying to operate across borders; stresses that compared to multinational enterprises, SMEs have fewer resources to spend on tax compliance
Amendment 86 #
Motion for a resolution Paragraph 3 3. Highlights that differences in national tax regimes can present obstacles to SMEs trying to operate across borders; stresses that compared to multinational enterprises, SMEs have fewer resources to spend on tax compliance and tax optimisation; points out that the share of expenditure used for tax compliance purposes is higher for SMEs than for
Amendment 87 #
Motion for a resolution Paragraph 3 3. Highlights that differences in national tax regimes present obstacles to SMEs trying to operate across borders; stresses that compared to multinational enterprises, SMEs have fewer resources to spend on tax compliance and tax
Amendment 88 #
Motion for a resolution Paragraph 3 a (new) 3 a. Warns of the risks and impacts that the creation of new green and digital taxes at the national level may have on SMEs, both in terms of high conduct standards and excessive compliance costs associated with these new tax obligations;
Amendment 89 #
Motion for a resolution Paragraph 4 Amendment 9 #
Motion for a resolution Citation 3 d (new) — having regards to the conclusions of the ECOFIN Council Meeting on 1 December 1997 concerning taxation policy - Resolution of the Council and the Representatives of the Governments of the Member States, meeting within the Council of 1 December 1997 on a code of conduct for business taxation - Taxation of saving,
Amendment 90 #
Motion for a resolution Paragraph 4 4.
Amendment 91 #
Motion for a resolution Paragraph 4 4. Notes that tax base harmonisation such as the common corporate tax base or the ‘Business in Europe: Framework for Income Taxation’ (BEFIT) could reduce the cost of tax compliance for SMEs that operate in more than one Member State; reiterates that taxing profits where the economic activities take place will allow governments to offer a level playing field for their SMEs, that struggle to cope with unfair competition from MNEs; highlights the need to tax corporations on the basis of a fair and effective formula for the allocation of taxing rights between countries;
Amendment 92 #
Motion for a resolution Paragraph 4 4. Notes that tax base harmonisation such as the common corporate tax base or the ‘Business in Europe: Framework for Income Taxation’ could reduce the cost of tax compliance for SMEs that operate in more than one Member State; stresses that its proposed introduction must not lead to direct or indirect taxation of companies by the EU;
Amendment 93 #
Motion for a resolution Paragraph 4 4. Notes that tax base harmonisation such as the common corporate tax base
Amendment 94 #
Motion for a resolution Paragraph 4 4. Notes that tax base harmonisation such as the common corporate tax base or the ‘Business in Europe: Framework for Income Taxation’ could reduce the cost of tax compliance for SMEs that operate in more than one Member State, while also contributing to design a fairer taxation system in the EU;
Amendment 95 #
Motion for a resolution Paragraph 4 4. Notes that tax base harmonisation such as the common corporate tax base or the BEFIT ‘Business in Europe: Framework for Income Taxation’ could reduce the cost of tax compliance for SMEs that operate in more than one Member State;
Amendment 96 #
Motion for a resolution Paragraph 4 a (new) 4 a. Notes the idea of a step wise implementation of unitary taxation in the EU, as a first step the formula apportionment could be applied to above- normal profits only ; highlights that pillar 1 of the recent OECD/G20 agreement leads to a re-allocation of such excess profits to market jurisdictions; invites the Commission to reflect on the expansion of the OECD pillar 1 principles in the EU with lower thresholds, higher allocation and a more comprehensive formula including tangible assets and employment;
Amendment 97 #
Motion for a resolution Paragraph 4 a (new) 4 a. Points out that the publication of the Commission's BEFIT proposal is expected by 2023 and that its adoption may take several years. Encourages the Commission and Member States to seek more short-term solutions to promote intra-EU transactions by SMEs and reduce tax compliance costs.
Amendment 98 #
Motion for a resolution Paragraph 4 b (new) 4 b. Commits that the FISC subcommittee in the European Parliament will develop, in dialogue with experts, national parliaments and citizens, guiding principles ahead of the BEFIT proposal by the European Commission in 2023;
Amendment 99 #
Motion for a resolution Paragraph 5 5. Notes that many Member States as well as the EU have introduced dedicated regimes favouring SMEs such as special VAT rules in order to offset the higher effective tax rates and higher tax compliance costs for SMEs; stresses that such special treatment, while generally
source: 697.827
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