MEPs believe that multinational companies should pay their taxes where they make their profits. They feel that today’s corporate tax competition – prompting aggressive tax planning and evasion, without any agreed framework - is harmful. Apart from the loss of public income, they consider it unfair that big companies pay hardly any taxes on their profits, whereas citizens and small and medium-sized firms have to pay their full share.
Country-by-country reporting, Common Consolidated Corporate Tax Base
Parliament recommends introducing mandatory country-by-country reporting by multinational companies of financial data, including profits made, taxes paid and subsidies received. It also advocates introducing clear definitions of “economic substance” and other determining factors of corporate tax bills.
Common agreement is also needed on what is allowed in terms of tax rulings and advanced “transfer pricing agreements” (how transactions are valued within the same company). The best way to achieve this and put an end to preferential regimes, mismatches between national tax systems and also most of the issues leading to tax base erosion at European level is a compulsory EU-wide common consolidated corporate tax base (CCCTB), which should be introduced as soon as possible, they say.
Transparency
MEPs urge EU member states to systematically share their national rulings and other tax information that has an impact on other member states. They insist that the European Commission should also receive this information, to enable it to play its proper role as competition watchdog to the full, as it did in the Starbucks and Fiat cases.
© European Parliament
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