12 November 2014

European Parliament: MEPs call for tax harmonisation and transparency on national tax rulings in 'Lux leaks' debate

Mr Juncker underlined that the tax rulings in Luxembourg were not illegal even though he admitted that "there probably was a certain amount of tax avoidance in Luxembourg, as in other EU countries. We find this everywhere in Europe because there is insufficient tax harmonisation in Europe", he explained, adding that Commissioner Moscovici will initiate proposals for an automatic exchange of information regarding national tax rulings."

EPP President Manfred Weber (DE) said he was confident that Jean-Claude Juncker will resolve the problems that are now on the table, adding that "it is not the EU that failed, but the member states themselves who have made no efforts to harmonise their corporate tax bases. We need transparency on national tax rulings as well as harmonised tax bases."

S&D President Gianni Pittella (IT) said he "feels indignation for people hurt by big companies that don't pay taxes where the profits were made. Tax avoidance is a world phenomenon and the biggest shame is that it is not even illegal. Therefore the law has to be changed. Mr Pitella proposed three measures: firstly a clear definition of “tax havens”, secondly severe penalties for offenders and thirdly country-by-country tax reporting.

ECR's Kay Swinburne (UK) also called for further action, especially against aggressive tax avoidance and underlined the need for global country-by-country reporting on national tax rulings. "This is long overdue", she said. Parliament should await the outcome of Commissioner Vestager's investigation before judging, she added.

ALDE President Guy Verhofstadt (BE) said the Investigation by the Commission must be completed by the end of the year and deal not only with three countries, but with the problem of tax evasion in general. He also called for a special investigative committee to be set up in Parliament and asked others groups to support this. "This is also a clear case where we need more Europe – to set up common tax compliance legislation and a convergence code not general harmonisation, because we don't know at what level to harmonise" he said.

Full press release

Reuters: EU's Juncker conciliatory on Luxembourg tax, Germany wants action

Jean-Claude Juncker, who served as finance minister and prime minister of Luxembourg for more than two decades, reacted for the first time since investigative journalists reported last week that the tiny state had granted deals to some 340 companies allowing them to avoid tax.

At a time of near record unemployment in the European Union, the affair has overshadowed the start of the new Commission, billed by Juncker as "Europe's last chance" to show citizens the bloc can act in their interests.

The revelations put Juncker under intense pressure to make clear his position on the tax deals and raised questions about whether they create a conflict of interest for him.

"I am politically responsible for what happened in each and every corner and quarter (of Luxembourg)," he said, adding that while in line with Luxembourg and European laws, the tax practices may not have been ethical.

Juncker, 59, said Luxembourg's tax authorities were independent of the government and denied being the brain behind the policies. Global brands such as PepsiCo, Amazon, insurer AIG and Deutsche Bank AG are reported to have benefited from deals with Luxembourg.

"I am not the architect of what you could call the Luxembourgish problem," Juncker told reporters in a surprise appearance at a daily Commission briefing.

"There is nothing in my past indicating that my ambition was to organise tax evasion in Europe," he added.

Full article on Reuters

© European Parliament