This Monday, the committee on economic and monetary affairs (ECON) as well as the legal affairs committee (JURI) of the European Parliament voted on new tax transparency rules for transnational companies. The Commission suggested that transnational companies are required to publish key tax data on a country-by-country basis for the EU-28 as well as for countries blacklisted as tax havens. Data for other third countries should only be reported on an aggregated level. The text adopted today significantly improves the Commission proposal and brings more transparency (1). The Greens/EFA group would have favoured stricter rules than adopted in committee today. Therefore, we insisted on a plenary vote on the negotiation mandate of the European Parliament for the upcoming trialogue. MEP Sven Giegold, financial and economic policy spokesperson of the Greens/EFA group commented:
“With this result, we are creating more justice for all taxpayers and fair competition for small and medium-sized businesses. It is a great success that the European Parliament has withstood the pressure from the Member States and many companies. This makes it more difficult for large corporations to avoid paying taxes where profits are generated. With his blocking in Council, Germany’s Federal Minister of Finance, Wolfgang Schäuble, helps multinationals to conceal their harmful tax practices before the public.
It is a shame that in the committee the conservative-liberal coalition together with the eurosceptic conservatives have introduced exemptions for corporations that could take the entire reporting to an absurdum (2). The same coalition also prevented a reduction of the high threshold for reporting companies of 750 million Euro turnover per year. In order to take effective measures against tax dumping, public country-by-country tax transparency must not be limited to a few companies. For banks and raw materials extraction companies, transparency has long been established and is universally accepted.”
The Greens / EFA Group has abstained in the vote because of exception rules inviting for abuse by corporations and will work to improve the compromise until the vote in plenary (presumably in July 2017).
(1) The EU Parliament calls on the EU Commission to review the 750 million Euro threshold. In addition, companies must publish more data and the data must be broken down for all third countries, not just for EU Member States and tax havens.
(2) Companies which are able to prove that the publication of certain data from third countries would result in competitive disadvantages must not publish this data. The Greens / EFA Group wanted to limit this derogation, but this could not be achieved.
Proposal of the European Commission:
Draft report of the co-rapporteurs in the European Parliament:
Draft compromises of the amendments tabled by the European Parliament: