Passed by 34 votes to three, and with seven abstentions, MEPs of the special tax committee approved new measures featured in a report that have greater "substance" than BEPS guidelines.
Corporate tax reforms need to be "implemented ASAP in [the] EU", and they need to go further due to the EU’s level of "integration", a spokesperson for the European Parliament told The Accountant.
The EU Parliament’s special tax committee’s report "supports" the OECD BEPS action plan but claims it does "not go far enough to address the scale of the tax avoidance problem.
The European Parliament’s special tax committee last night approved an EU-wide framework to crackdown on corporate tax avoidance.
The new recommendations MEPs voted on last night "should be the basis for further action at an EU and global level", according to the report.
MEPs at the special committee on tax vote count on Monday supported country-by-country reporting, including a compulsory EU wide consolidated corporate tax bases (CCTB) that aim at:
-ending multinational companies shifting profits to "preferential regimes" or cashing in on "mismatches" between national tax systems,
-clarifying the legal term "economic substance",
-sharing tax ruling information between member states and the European Commission (EC).
The latter recommendation comes in light of the EC’s investigation into "tax rulings" given to Fiat in Luxemburg and Starbucks in the Netherland, whereby each country’s national tax authority warned the respective company’s in advance of their tax bill.
While tax rulings are technically legal, the EC later ruled that Luxemburg and the Netherlands had broke EU state aid rules by giving Fiat and Starbucks a selective advantage over other businesses.
MEPS therefore urged member states to counter tax avoidance and aggressive tax planning by sharing information that impacts other nations in order to bolster transparency.
Moreover MEPs recommended better protection for whistleblowers, and noted the Luxleaks revelations that relied "on information provided by former ‘Big Four’ employee, Antoine Deltour, who now faces court charges in Luxembourg".
The European Parliament also expressed "regret" that BEPS does not adequately address "harmful tax regimes, digital economy and transparency" and called for institutional links between the OECD and European Commission to be strengthened.
Multinational companies have a "last opportunity" to contribute to the EU Parliament’s tax debate on November 16. The committee’s report will be put to a vote throughout the last week in November.