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19 May 2016 |
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POLICY TAKEAWAYS |
MEPs adopt
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More than two months after EU member states in the Council reached an agreement on the Commission’s proposal on country-by-country reporting (CBCR) to tax authorities, the Parliament finally adopted its opinion on 12 May. The new rules will oblige multinationals with total consolidated annual revenues above €750 million to file a country-by-country report in the EU member state in which the ultimate parent entity of the group is resident for tax purposes. Members of the European Parliament (MEPs) want the Commission to have full access to information exchanged among member state tax authorities, largely to better assess whether tax practices comply with EU state aid rules. It is no surprise that member states are not keen on the idea – plus, legal constraints would make it hard to implement anyway. Just as in October 2015 with the directive requiring EU countries to exchange information on cross-border tax rulings, MEPs resented the fact that member states did not wait for the Parliament to make its recommendations before agreeing on the CBCR text in the Council. As is often the case on direct taxation proposals, the Parliament’s role was confined to the consultation procedure here – the Council is not bound by MEPs’ position. The Council will now formally endorse the proposal in the coming days. Legislative work is just starting on a sister proposal on public CBCR – this time under the co-decision procedure (same weight for Council and Parliament). We can expect MEPs, led by rapporteur Evelyn Regner (S&D, Austria), to make the most of their legislative power to impose their views – and that forthcoming trilogue negotiations will be arduous. |
EU should 'seriously consider' blacklisting US, Greens say
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New research commissioned by the Greens/EFA group in the European Parliament makes the case for the US to be considered as a tax haven under the upcoming EU blacklist, which is expected for this summer. The Greens have become standard bearers for the fight against tax avoidance (alongside their fight against TTIP/CETA). Sometimes constructive, sometimes provocative, their work is nonetheless never ignored and increasingly shapes the tax debate in Brussels – which is not to everyone’s liking in the Parliament. The report condemns loopholes in US legislation in registering ownership and control of companies. The Greens also deplore the lack of reciprocity between the EU and the US. In particular, by not fully committing to automatic exchange of tax information with other countries, EU member states provide more tax information to the US than the other way around. The study calls on all countries to create public registries of beneficial owners, as well as a withholding tax scheme on all EU-sourced payments against non-compliant financial institutions – just like the US is already doing. Unsurprisingly, the European Commission – already probing several US companies in relation to possible unfair tax advantages – adopted a more cautious stance than the Greens on the issue. |
Parliament postpones inquiry committee on Panama Papers
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The European Parliament's conference of Presidents decided to delay the formal setting up of an inquiry committee on Panama Papers to early June. The decision stems from concerns raised by the Parliament's legal service over the draft committee's mandate, as outlined in a letter to Parliament President Martin Schulz dated 11 May and obtained by POLITICO. In particular, the legal service found the draft mandate went beyond the scope of an inquiry committee, and lacked clarity and distinction from the mandate of the special committee on tax rulings (TAX2). Parliament leaders voiced support for an inquiry committee under increasing political pressure when the Panama Papers came out – yet, quite a few influential MEPs still believe it is a waste of Parliament resources. Unlike special committees, committees of inquiry are established in the Treaties as a parliamentary control instrument, but their investigative powers fall short of those of similar committees in national Parliaments. Once the conference of Presidents validates the mandate in early June, the proposal needs to be supported by a majority in plenary, most likely in the week of 6 June, with no possibility for MEPs to amend the mandate. Before this happens, TAX2 will be finalising its work. The draft report by Jeppe Kofod (S&D, Denmark) and Michael Theurer (ALDE, Germany) – to be adopted in committee on 21 June – has just been published. Stay tuned with #TaxToGo for further information on the latest TAX2 developments. |
#PANAMAPAPERS |
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Panama Papers were first revealed by the International Consortium of Investigative Journalists on 3 April 2016 – making it one of the trendiest topics in the Twittersphere since then. But who is most vocal on the issue? We examined all tweets and retweets (RTs) from all MEPs featuring the keywords “Panama Papers”, #PanamaPapers or #PanamaLeaks for the whole month of April 2016 – here are those MEPs who ranked first. Key – 50% of all tweets and RTs from MEP Jeppe Kofod during the month April were about the Panama Papers. 
Note – out of the 190 MEPs who tweeted or retweeted about Panama Papers in April, we focused our analysis here only on the 31 most vocal MEPs, i.e. those who tweeted or retweeted about Panama Papers at least 10 times in April. |
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COMING UP |
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20 May: What role for the Greens in Europe to fight tax evasion and tax avoidance? 23-24 May: Committee on legal affairs (JURI) European Parliament | Brussels, Belgium |
23-24 May: Committee on economic and monetary affairs (ECON) 24 May: Special committee on tax rulings (TAX2) |
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