On 14 December, the European Parliament adopted its final report of the PANA Committee of Inquiry on money laundering, tax avoidance and tax evasion. Once again, the treacherous tax avoidance practices of large corporations and rich individuals were discussed in great detail. The demands of the report are an important step towards combatting these methods. However, on the home stretch, MEPs of the Conservative and Liberal factions thwarted some important elements.
With the temporary end of the work of the Committee of Inquiry on money laundering, tax avoidance and tax evasion (PANA), which was established last year, this week the plenum of the European Parliament voted on the final report. Having worked closely together, rapporteurs Jeppe Kofod (S&D) and Petr Ježek (ALDE) put the results of the Committee on paper and agreed with their colleagues on a number of recommendations for Council and Commission.
The conclusions of the report refer to a large number of legislative weaknesses in the EU area and the inadequate cooperation between Member States, such as the inadequate communication of tax information, the lack of common European standards and regulations on tax avoidance and tax evasion as well as the insufficient resources of supervisory authorities in the Member States and EU institutions.
The debate on the PANA final report in the European Parliament showed the clear position of MEPs towards the results. There was particular disappointment that some countries in the Council, above all Ireland, Malta, Cyprus and Luxembourg, continue to block the effective fight against tax avoidance and tax evasion. Parliament has to adopt a progressive position to counteract the loss of trust of the population in the EU, which resulted from the alleged inactivity regarding the drainage of tax swamps. Apart from that, the MEPs paid tribute to the journalists, who, due to their investigative research made a major contribution to a broader public debate on the tax avoidance strategies of companies and wealthy individuals.
Another topic was a common EU list of non-cooperative countries and territories for tax purposes. Last week, the Council voted on two of such lists. Hence, 17 countries, among them the United Arab Emirates and Panama have been put on the so-called black list as tax havens. The second list, defined as grey list, comprises a number of third countries, which have also been rated as problematic but which have declared their readiness to cooperate with the EU in matters of tax. A number of MEPs, among them Sven Giegold (Greens), regard these lists as incomplete and politically distorted as both EU countries and relevant financial centres such as the USA are not mentioned.
During the plenum debate, some MEPs also demanded the consequent implementation of ongoing initiatives. In this context, Jeppe Kofod (S&D) mentioned the Common Consolidated Corporate Tax Base (CCCTB) to ensure that taxes are exclusively paid in the country where profits have been generated. Apart from that, an EU-wide common minimum corporate tax rate is required to end the destructive competition between EU Member States. Furthermore, MEPs Sven Giegold (Green) and Miguel Urbán Crespo (GUE/NGL) came out in favour for the permanent establishment of a Committee for money laundering, tax avoidance and tax evasion.
As also Evelyn Regner (S&D) remarks, adopting the report in the European Parliament represents an important advance in the fight against tax evasion. However, the MEPs of EPP and ALDE managed to push through some dilutive amendments. In doing so, they frustrated the demands for a ban on letterbox companies and common European minimum tax rates for corporate taxes.