On December 16, 2015 the European Parliament (EP) voted inplenary session on the Economic and Monetary Affairs (ECON)Committee’s report entitled “Bringing transparency, coordination andconvergence to Corporate Tax policies in the Union”. The report was adopted by 500 votes to 122, with 81 abstentions.
Following the LuxLeaks scandal last year, the EP decided in December 2014 to launch the drafting of a legislative own-initiative report on Bringing transparency, coordination and convergence to Corporate Tax policies in the Union. The report contains a number of recommendations to the European Commission which are built on the work of the Parliament’s Special Committee on Tax Rulings, whose recommendations were approved at the plenary session on November 26, 2015 (see Announcement). This report is set up in the form of a legislative initiative procedure which means that the EC will have to respond to it.
The ECON Committee report contains a number of recommendations to the EC on topics such as Country-by-Country Reporting, protection of whistleblowers and CCCTB. The members of the EP especially requested the European Commission to table a certain number of legislative proposals, including:
For a more detailed summary of the EP’s recommendations, please refer to our previous publications (see ETF 263 and ETF 265).
The European Commission now has three months to respond to the proposed recommendations, either with a legislative proposal or with an explanation for not doing so. Meanwhile, the EP endorsed the extended mandate of the TAXE II Special Committee on Tax Rulings for another six months. The Committee will continue its work, focusing on harmful corporate tax regimes and aggressive tax planning, including state aid in tax matters and EU Member States’ compliance with tax legislation.
The assignments of two different parliamentary committees dealing with corporate taxation, as well as the extension of the TAXE Committee’s mandate (as TAXE II Committee), reflect the increasing pressure the EP is putting on other European institutions with regard to countering aggressive tax planning and promoting tax transparency. The legislative own-initiative procedure remains the most effective tool for the EP in this regard, as the European Commission will have to react to each of its recommendations by issuing a legislative proposal or by giving an explanation for not doing so.
Should you require further assistance in this matter, please contact the EU Tax Centre or, as appropriate, your local KPMG tax advisor.
Chairman, KPMG’s EU Tax Centre and Partner, Meijburg & Co
Director EU Tax Services, KPMG’s EU Tax Centre
Director, Meijburg & Co
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