Tax competition as such cannot be avoided, but today’s system has reached its limits and led to unwanted side effects. Small firms should not have to bear the tax burden of multinationals that pay very little. Action is needed to harmonise corporate tax practices across Europe, so as to make tax competition clearer and fairer. This was the key sentiment voiced at Tuesday’s meeting of the Special Committee on Tax Rulings with finance ministers from Luxembourg, Italy, France, Spain and Germany.
MEPs expressed concerns about the unanimity rule in the Council on tax issues and doubts as to whether all 28 member states are really willing to progress in the fight against “aggressive” tax planning practices. They also called upon the Council to address the Parliament’s wish for country-by-country reporting of corporate profits and taxes in countries where business is done, as stated in Parliament’s position for negotiations on the Shareholder rights directive. Finally, MEPs also expressed dismay at the Council’s lack of openness about tax discussions in its Code of Conduct Working Group and pressed it to come up with a common definition of “aggressive” tax planning.
Source: European Parliament