"EU Commission should fully utilise EU state aid law as the ultimate weapon against tax dumping", say S&D MEPs

"EU Commission should fully utilise EU state aid law as the ultimate weapon against tax dumping", say S&D MEPs

S&D Euro MPs called on the European Commission to make full use of EU state aid rules in the fight against tax avoidance, following an exchange of views with EU Competition Commissioner, Margrethe Vestager, in a meeting of the TAXE special committee in Brussels today. They also called on the Commission to urgently provide some guidelines for companies and member states about what type of taxation is in line with EU rules.
 
S&D Group spokesperson on the tax special committee (TAXE), Peter Simon, stated:
 
"It's about time that the European Commission used the ultimate weapon of state aid law in the field of taxation to a greater extent than it currently does. By providing clear guidance on the application of EU state aid law, the Commission can say, once and for all and unequivocally, that special treatment in terms of tax for certain undertakings is illegal. This would mean that in future companies and member states would refrain from organised tax dumping out of fear of consequences.
 
"In other areas, such as the financing of services of general interest, the EU Commission considers itself able to regulate even the smallest detail through respective guidelines. Why would they not be able to do the same in the field of tax arrangements? Both from a legal and factual point of view, the European Commission is able to develop equally strict guidelines for company taxation, and to set an effective standard in the fight against tax avoidance organised by the state. The EU Commission has an array of options at its disposal. It is not a question of being able to act, but only of good will.
 
"The Commission however remains hesitant to immediately create guidelines. Its argument being, that it can only develop such guidelines after further individual decisions are taken, is hard to understand. The European Commission's responsibility is to promptly develop guidelines. As new individual decisions are taken, the guidelines can be accordingly adapted and updated. Only acting immediately will send out a clear signal to member states: large international companies and consultancies that illegal state aid will be met with zero tolerance. Therefore, the Social Democrats will not let up - Guidelines now!"
 
"Moreover, the S&D Group also demands enhanced efforts and reforms from the Council, which was represented by Dr. Wolfgang Nolz, chairman of the Code of Conduct Group for Business Taxation."
 
S&D MEP, Anneliese Dodds, who will draft the report on "Bringing transparency, coordination and convergence to Corporate Tax policies in the Union," concluded:
 
"If we are genuinely going to stop tax fiddling across Europe once and for all, then the Code of Conduct Group has a critical role to play. When it was first established, the Group was truly ground breaking – establishing, for example, a list of potentially harmful tax practices for member states and their dependent territories. But in recent years, the Group seems to have suffered a reduction in its capacity, its reputation and its effectiveness.
 
"I want to see the Group's role restored and see it playing a vital role in our ongoing battle against tax fraud, tax evasion and aggressive tax avoidance. That's why we are calling on member states to review the Code of Conduct itself, and to look at the mandate of the Group to ensure that it has the expertise, the profile and the tools that it needs to stop a race to the bottom in Europe when it comes to corporate tax."