This week, several debates on taxation and in particular on tackling tax avoidance took place in the Committee on Economic and Monetary Affairs (ECON) of the European Parliament. Apart from the competent Commissioner Pierre Moscovici, experts of the OECD, the Organisation for Economic Cooperation and Development, also answered the questions posed by MEPs. In particular in times of crisis, the appropriate taxation of the profits made by multinational corporations is an important issue, which is not only concerned with filling empty state coffers, but above all with justice and fairness.

As a reaction to the Luxleaks scandal, Commissioner Moscovici presented his first plans two weeks ago in order to ban unfair tax practices in some Member States (AK EUROPA reported on this). This week, the French socialist faced questions by MEPs in respect of his plan to automatically exchange tax rulings of national tax offices between Member States. However, interestingly enough, the planned Directive must not be adopted by Parliament, but only unanimously by the Council of Ministers.

MEPs demand further tax initiatives of the Commission

Moscovici was even philosophical during the debate and reminded the participants: large corporations quasi making their own decisions as to how much tax they want to pay would mean a breach of the social contract. His proposal for more tax transparency would be a “small revolution”; other plans were concerned with the publication of country-specific tax information of large companies.

Even though the representatives of the people predominantly welcomed the draft proposal, they also demanded further measures, among them a Common Consolidated Corporate Tax Base (CCCTB). Moscovici promised to present a relevant action plan in the summer; he remarked, however, that certain projects might possibly only be realised within the scope of “enhanced cooperation” between certain Member States. The Commissioner also pointed out how important the cooperation of EU Parliament and Commission would be in this matter to prevail against the possible resistance of national governments. Elisa Ferreira of the S&D faction thought it positive that meanwhile the Council would also undergo a change in their way of thinking which would increase the possibility of the plan to be successful.

OECD hopes for early successes of the BEPS project

The Secretary General of the OECD, José Ángel Gurría explained to the Committee that thanks to his organisation one was able to observe “revolutionary” developments with regard to taxation: on the one hand, the opportunities of hiding untaxed money were becoming increasing scarce; on the other hand, the BEPS Initiative (Base Erosion and Profit Shifting) would lead to profits at last being taxed where they are generated.

The Director of the Centre for Tax Policy and Administration at the OECD, Pascal Saint-Amans, presented the BEPS project. This would consist of 15 concrete action proposals, which would be implemented step by step from 2016 – 44 countries from OECD and G20 would be participating. The OECD had developed model laws to make the implementation as easy as possible for the participating states. The most important measures would concern “tax oases”, harmful tax practices, double tax agreements, “transfer pricing”, which would enable multinational companies to save tax, as well as transparency (e.g. publication of tax data). He again emphasised the responsibility of his organisation for ending bank secrecy, which was also controversially discussed in Austria.