26 February 2021

Giegold: An earthquake moment in the tax world: breakthrough for tax justice in Europe!

At the meeting of the Ministers for Economic, Industrial and Research Policy (COMPET) this afternoon (Thursday, 25 February), a landmark decision was taken in the fight against tax avoidance.

With a broad and qualified majority, the COMPET adopted a proposal for public country-by-country reporting, despite a continued blockade by several Member States. The proposal of the Portuguese Council Presidency provides for large companies in the EU to be obliged to publicly report on their profits and taxes paid per country. This transparency per business country will make it much more difficult to shift profits to tax havens. The European Parliament had already defined its negotiating position on public country-by-country reporting in 2017. Four years later the Council is now finally clearing the way for the final negotiations in the so-called “trilogue” procedure. Already at the end of 2019, the Finnish Presidency tried to get an almost identical text through the Council. The Portuguese Presidency achieved a breakthrough because Slovenia and Austria agreed this time.

However, the Council’s decision falls short of the Parliament’s position by insisting on a safeguard clause and limiting country-by-country reporting to European Member States and countries on the EU list of tax havens.

MEP Sven Giegold, financial and economic policy spokesperson of the Greens/EFA group commented:

“This is the breakthrough for fair corporate taxation everywhere in Europe. Public country-by-country reporting is a minimum transparency requirement for companies with maximum effect for the common good. If large companies have to disclose their profits and taxes paid per country, tax trickery is hardly possible any more. This is a strong barrier against tax avoidance. After decades of political controversy, strong progress against tax evasion has now finally been made. The decision is an enormous success as we work for greater tax justice. Fair taxation is indispensable in a social market economy. While Amazon’s profits went through the roof untaxed during this pandemic, locally retail is dying. Big business must contribute to the financing of the urgently needed investments into our future. This decision finally makes it clear: big business is not above the tax law. 

The Council decision is of great personal importance to me. For ten years I have been working in the European Parliament towards binding tax transparency for large companies. At the insistence of the Greens, we have already pushed through tax transparency for banks, and now it is finally the turn of all large corporations, too. What motivates me is the credibility of our democracy. A strong democracy must be in a position to decisively oppose tax evasion by large corporations. After years of delay and blocking, governments have finally agreed on an effective tool in the fight against tax avoidance. This is an earthquake moment in the tax world. It is a breakthrough for greater tax justice and a shining ray of hope for all those who are deeply concerned about the growing gap between rich and poor.”

Background:

The following tried to block this important proposal by voting no or abstaining: Germany, Ireland, Luxembourg, Malta, Sweden, Czech Republic, Hungary, Cyprus.

In favour: Finland, Greece, Denmark, Estonia, Austria, Romania, Poland, Netherlands, Italy, Slovenia, Spain, France, Bulgaria, Belgium.

Sven Giegold

© Sven Giegold