S&D Group on Tax rulings: "Starbucks and Fiat illegal - New dimension in fight for tax justice"
The S&D Group welcomes today's Commission decision on tax rulings, in which the Commission concluded that "Luxembourg has granted selective tax advantages to Fiat's Finance and Trade Company and the Netherlands to Starbucks' coffee roasting company". With today's decision the Commission ruled that such practices are illegal under state aid rules.
Commenting on the decision, Peter Simon, S&D Group spokesperson on the special TAXE committee, said:
"These precedents mark the beginning of a new era in the fight against tax dumping organized by the state. The argument used so far - that all tax models were within the boundaries of the law - cannot be upheld. In its role as Guardian of the Treaty, the Commission makes it clear: Illegitimate tax models are also illegal.
"This decision gives the fight against tax avoidance a new dimension. This should be the beginning of the end of the business model 'tax avoidance organized by the state'. This is an important victory for tax justice and honest tax payers, including companies which did not receive special treatment.
"This decision shows that EU competition law is a powerful weapon against tax avoidance models. The Commission now needs to use all further possibilities in this area. Starting from these cases we need detailed EU state aid guidelines in the area of corporate taxation.
"EU state aid law should, however, not be seen as a panacea in the fight against tax avoidance by multinational companies. It will effectively put a stop to certain practices; however, the current momentum needs to be used in order to set up a comprehensive legal framework for fair corporate taxation including a common corporate tax base and mandatory country-by-country reporting for companies. The aim is that profits are taxed where they are made."
S&D Euro MP and European parliament's co-rapporteur of the special TAXE committee Elisa Ferreira added:
"We can only congratulate the Commission for having investigated tax rulings in Europe in order to make the tax systems in Europe fair, transparent and acceptable for citizens.
"These two cases have proven that aggressive tax competition among States to attract companies and profits is the norm in the EU as the TAXE Special Committee has confirmed in its draft report. These investigations mark a qualitative change in the EU by making clear that in the tax matters, Europe is more a jungle than an area of cooperation.
"However, we ask the Commission to go much further. We also ask member states to progress in a serious and transparent way on the exchange of information on their tax rulings. Member states must abandon their comfort zone based on the need for unanimity rule in EU tax decisions. This unanimity rule helps to maintain the huge tax injustice imposed on citizens and causes a race to the bottom, in which multinationals will end up paying no taxes in Europe with all responsibility for the national budget lying on the usual victims, citizens and Small and Medium Sized Enterprises".