The recent scandals of Luxleaks, Panama Papers and Paradise Papers, have proven the extent of the phenomena of tax evasion and tax avoidance, as well as the negative role played by European intermediaries and Member States in the exposed mechanisms.
Every year, Member States lose 1 000 billion of tax revenue and deprive themselves of amounts that could have been invested by public authorities in education, health or employment. Citizens cannot always be forced to contribute more while large corporations continue to accumulate profits and escape taxation. Meanwhile, the existing EU rules have proven insufficient to shield public accounts against tax evasion and tax avoidance. Therefore, Members of the Progressive Caucus* underline the urgency to introduce ambitious and effective measures at European and national level to fight against tax avoidance, evasion by individuals and companies and to insure tax equality between taxpayers. In doing so, we should not be hypocritical: there are MSs which are acting as tax havens, such as, for example, Ireland, Luxembourg, Malta and the Netherlands. The governments of those MSs currently allowing those practices, should be exposed and accept the consequences of supporting such an imblance, thus be sanctioned, until they abandon their current negative and harmful approaches.
The European Union should:
– ensure that corporations are being taxed where they generate their profits;
– establish a minimum effective corporate tax rate at European level, together with a Common Consolidated Corporate Tax Base, without dangerous exemptions and derogations;
– establish a more ambitious ‘black list’ of tax havens which should include MSs which allow tax avoidance;
– act in order to establish stronger international cooperation and exchange on tax matters;
– overcome unanimity with regard to certain decisions on tax matters;
– establish a more ambitious list of non-cooperative jurisdictions, which should include also all the countries which apply a zero (or close to zero) corporate tax rate, cover EU jurisdictions and not be driven by political considerations. Listed jurisdictions should be subject to harmonised, effective and dissuasive sanctions. The European Commission should furthermore monitor Member States’ tax policies and tackle any harmful tax measures they introduce;
– fight against letterbox companies and bearer shares, which have played a very negative role in the mechanisms revealed by the Panama Papers scandal;
Furthermore measures ensuring more transparency should be introduced, starting from:
– introducing immediately an European mechanism to protect whistle-blowers revealing information in the public interest;
– establishing a public country-by-country reporting obligation for all large companies, which should disclose to the public the taxes they pay and the profits they make, together with other relevant information, in each jurisdiction in which they are present;
– ensure that information on Beneficial Ownerships of all companies, trusts and foundations are publicly available through an EU central registry;
– ensure that all tax rulings issued by EU MSs are publicly disclosed, to guarantee that citizens and SMEs are aware of the conditions which apply to large multinationals.
*The Progressive Caucus is a space of dialogue based on confidence-building and open debate. It aims at analysing differences and building bridges between progressive allies in the European Parliament and across Europe. It has been established by progressive MEPs of different political groups and is open to everyone in the community of the European Parliament standing for solidarity, democracy, social justice and sustainability.
Press contact of the Progressive Caucus: Marie Geredakis, firstname.lastname@example.org