The European Parliament continues to hold the flame against corporate tax dodging
Following the Paradise Papers revelations, the European Parliament decided today to establish a new special committee on tax fraud, tax evasion, money laundering, tax avoidance and aggressive tax planning.
Oxfam’s Policy Advisor on tax and Inequality Aurore Chardonnet, said:
“With this new committee on tax issues, the European Parliament has again proved its willingness to tackle tax avoidance and push EU countries to adopt and implement the reforms needed to avoid an umpteenth tax scandal.
"The latest attempts at global tax reform like the OECD's agreement on base-erosion and profit-shifting has clearly not solved the issue of corporate tax avoidance. We need political action after the Paradise Papers scandal to identify new trends in tax avoidance schemes in a post-BEPS era. We invite the European Parliament to question the heads of multinationals particularly exposed in the latest revelations, especially as their tax dodging schemes operate in EU members states such as the Netherlands and Ireland.
“The committee should also encourage EU countries to put their own house in order by ensuring they rapidly implement all the EU tax legislation adopted over recent years, and by looking deeper at the harmful tax practices within Europe itself.”
- This is the third committee established by the European Parliament on tax fraud, tax evasion, money laundering, tax avoidance and aggressive tax planning. Two previous committees were established in February 2015 (TAXE 1) and December 2015 (TAXE 2), The report of TAXE 1 recommended enhanced cooperation and coordination by EU member states on tax issues, including on tax rulings, a compulsory Common Consolidated Corporate Tax Base (CCCTB), public country-by-country reporting, protection of whistle-blowers and third country dimensions. These recommendations have only been partially adopted.
- Following the Panama Papers revelations, the European Parliament also decided in June 2016 to establish a committee of inquiry, known as the PANA committee, to investigate alleged contraventions and maladministration in the application of European Union law in relation to money laundering, tax avoidance and tax evasion. During its mandate – which came to an end on 8 December – the Committee held 30 official meetings, conducted 8 fact-finding missions and commissioned 9 academic studies into various aspects of money laundering and tax evasion.
- Legislation passed by the European Parliament in July 2017 should require the biggest companies to publicly declare their earnings and taxes in all countries where they operate. However, the rules, known as public country-by-country-reporting, include a “get out” clause allowing big companies to retain information if they declare the publication damaging for their own business. Some European national governments are now blocking a final agreement in the council, meaning the legislation is not yet in force.
- Last December, the EU released a first EU blacklist of tax havens, which did not look at European member states. This is despite the fact that four EU member states – the Netherlands, Luxembourg, Malta and Ireland – fail the EU's own criteria for tax havens, according to Oxfam's report ‘Blacklist or whitewash?’, which showed what a robust blacklist of tax havens would look like if the EU were to objectively apply its own criteria and not bow to political pressures.
- Following the Paradise Papers scandal, Oxfam released a 5-point plan outlining steps governments should take to prevent further scandals on a global scale. This includes establishing a global blacklist of tax havens that names countries such as Ireland and the Netherlands - key players in the Paradise Papers scandal.
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