Author: European Economic and Social Committee.
The following press release was issued by the European Economic and Social Committee on .
Present EU proposal insufficient as only affects 10 to 15 % of multinationals
On 21 September, the EESC plenary adopted an pinion targeting aggressive tax planning by multinationals. The European Commission proposal on income tax transparency provides for multinationals with an annual turnover of over 750 million EUR to disclose publicly the income tax they pay and other relevant tax-information on a country-by-country basis. Aggressive tax planning by some multinationals is estimated to erode EU tax revenues by up to 70 billion euros a year.
Although endorsing the Commission’s new measures, the EESC called on the Commission to aim for a more far-reaching proposal and to gradually lower the 750 million EUR turnover threshold, as the present proposal would only apply to a mere 15% of multinationals.
“Following the public outcry of recent years concerning multinationals’ EU tax engineering, the EU has a duty to address these concerns and applying this measure to a token 15% of multinationals would make the EU completely out of touch with the concerns of nearly every European citizen”, said opinion rapporteur Victor Alistar (Various Interests Group – RO).
In addition, the Committee called for separate financial statements to be published not only for each Member State, but also for each non-EU country where large multinationals operate, since consolidated data might help conceal aggressive tax planning operations. Multinationals should also make available a list of operations carried out in non-EU countries regarded as tax havens. Data on assets and sales should also be published.
Aggressive tax planning by multinational corporations has often hit the headlines in recent times and caused public outcry. The Commission’s tax transparency proposals were brought forward in the wake of the Panama Papers and LuxLeaks scandals that exposed deals which saved some of the world’s largest companies – including Apple, Ikea and Pepsi – billions of dollars in taxes. The tax dealings of Apple in Ireland, Starbucks in the Netherlands and Amazon and Fiat in Luxembourg have also brought the issue to the fore against a background of governments lacking the necessary resources to carry out their social programmes.
The additional information that the EESC wishes to see published is part of the OECD’s BEPS (base erosion and profit shifting) standards, which have already been adopted by the EU and most Member States. It is an automatic exchange of tax-related information between Member States’ tax authorities, but not available to the public. The Commission is of the view however that this additional information might jeopardise the competitiveness of European companies and that certain data may be misinterpreted by the public.
The EESC also recommends that data be made more easily accessible to civil society and business through publication in a central register in each Member State, in an open system, a standard EU-wide format and a major international language in addition to the local language, thus enabling genuine access to data for the whole single market.
Copyright European Economic and Social Committee.