Combating aggressive tax planning

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By rapporteur Petru Sorin Dandea

In January, the European Commission presented a new legislative package to combat aggressive tax planning. The package aims to establish a transparent model of cross-border taxation which tackles tax avoidance.

The idea was put forward in 2015 with a public consultation and has now been made more urgent by the Panama Papers scandal. It was presented by the European Commissioner for Financial Stability, Jonathan Hill.

The Commission’s proposals include reporting in each Member State on the tax paid by large companies. National tax authorities will retain their full powers.

Several thousand multinational companies will be subject to this requirement, but the European executive has promised that it will not affect their competitiveness. The proposal also covers non-European companies which do business in the EU.

The EESC supports the Commission's efforts to combat aggressive tax planning which distorts competition in the single market. While small and medium-sized companies pay taxes which can amount to 30 or even 40% of their annual income, multinational corporations use aggressive tax planning to avoid the usual rate of taxation – or to avoid paying taxes at all on some of their income.

This practice is also immoral. While employees pay taxes and social security contributions which can amount to a considerable proportion of their salary, multinational corporations transferring profits to tax havens avoid taxes entirely.

In its opinion, the EESC has drawn up a set of proposals which could improve the Commission package. The most important of these brings financial corporations within the scope of the directives in the package and taxes all income made by multinational companies in jurisdictions acknowledged to be tax havens.

 

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Lupta împotriva planificării fiscale agresive - Article in the original language