PN MEPs insist taxation should remain national competence

The three Maltese MEPs within the European Popular Party voted en bloc against the European Parliament Report on tax rulings over their opposition to establishing a common EU tax scheme.

David Casa, Roberta Metsola, and Therese Comodini Cachia expressed their strong reservations and stressed their firm belief in tax transparency and the fight against tax fraud. But despite their opposition, the resolution was passed by 508 votes to 108, with 85 abstentions.

“But in our view that does not mean the mandatory introduction of a Common Consolidated Corporate Tax Base (CCCTB).  The EU is not a homogenous area and not all regions in the EU face the same economic realities, be it for their domestic market size, geographical realities or resources,” the three MEPs said in a statement issued Wednesday afternoon.

They added that while the report did contain useful points on transparency, which they supported, “we are of the view that questions of tax of the nature of CCCTB must remain an issue of national competence since they reflect the different economies of Member States.”

“We are convinced that a one-size-fits all approach is not the right way forward for Europe as inevitably it would be the EU's smaller economies, such as Malta, that would bear the disproportionate brunt of such policies."

Parliament agreed to introduce mandatory country-by-country reporting by multinational companies of financial data, including profits made, taxes paid and subsidies received. The resolution also advocates introducing clear definitions of “economic substance” and other determining factors of corporate tax bills.

MEPs urged member states to systematically share their national rulings and other tax information that has an impact on other member states and insisted that the European Commission should also receive this information, to enable it to play its proper role as competition watchdog to the full, as it did in the Starbucks and Fiat cases.

Whistle-blowers whose revelations promote the public interest should be better protected, the text says, noting that the “Luxleaks” revelations were made by investigative journalists, based on information provided by former “Big Four” employee, Antoine Deltour, who now faces court charges in Luxembourg.

The Commission’s proposal for the CCCTB rested on the belief that companies operating across borders within the EU could benefit from a simpler way to calculate their taxable profits. Under the scheme, businesses would have to comply with just one EU system for computing their taxable income, rather than the current situation where they have to comply with different rules in each Member State in which they operate.

The aim of the strategy is to kick-start negotiations in the European Council which has stalled largely because of the scale of the original proposal in 2011.

The Commission proposed a common tax base without consolidation, which would allow Member States to tax their share of the base at their own corporate tax rate.

The main focus of the CCCTB is on facilitating EU and third-country business, primarily those active in more than one Member State within the EU.