- Report demands new legislation to crack down on tax avoidance and evasion
- Report co-authored by South East Labour MEP Anneliese Dodds
- European parliament will vote to approve the proposals on Wednesday 16th December
- Proposals must be implemented by Commission in one year
A new comprehensive legislative report is due to be introduced by the European Parliament next week to strengthen recent efforts to clampdown on aggressive tax avoidance and evasion.
This new report will make concrete recommendations that must be adopted into legislative proposals by the European Commission within one year. If the Commissioner responsible fails to do so, they must explain the reasons why in an appearance at the European Parliament.
The report has already been approved by the Parliament’s Economic and Monetary Affairs committee and is split into three sections: transparency, coordination and convergence; each with a series of recommendations.
One major highlight of the report is mandatory, public country-by-country reporting, meaning that all companies that operate across borders must publicly report on where they make their profits and where they pay their taxes. As part of efforts to bring more people forward as whistle-blowers – as happened in the lux leaks scandal – the report also introduces better protection for those who report misconduct or illegal activity to the authorities or the public.
Companies that try to use tax havens to hide their profits or shift their tax will also face tough new sanctions. A common definition of tax havens will be introduced across the EU and those firms that use them will be prevented from accessing any EU money, including Common Agricultural Policy funds.
Anneliese Dodds MEP, co-author of the report said: “This report shows the determination of both the European Parliament, the people of Europe and in the UK to see real legislative change to stop tax dodging by big multinational firms. By introducing laws at EU level, we can prevent companies jumping across borders to reduce their tax bills to almost zero.”
“The lux leaks scandal last year showed how much these corporations have been getting away with dodging tax that could have been used to build schools, hospitals or pay down the national debt. By offering greater protection for whistle-blowers and forcing companies to make public exactly how much profit they make and where they pay it we can see tax justice begin in earnest.”