Fighting tax havens: beyond a committee of inquiry on tax rulings
The European United Left/Nordic Green Left (GUE/NGL) group in the European Parliament seeks maximum public pressure on the EU-wide system of corporate tax avoidance and tax evasion. We put the interest of the majority of the 500 million people in the EU first and foremost and refrain from narrow-minded political games. Hence, we support a committee of inquiry on tax rulings despite serious shortcomings in the proposal of the Greens/EFA group.
An Initiative Report by the Committee on Economic and Monetary Affairs of the European Parliament as suggested by EPP, S&D and ALDE groups is unacceptable. It is an offense to citizens who are deprived of the fruits of their labour by EU-wide tax theft amounting to 1 trillion euros a year.
The S&D and Greens/EFA have prevented a coherent response to tax havens by denying support for our motion of censure. They back and thus protect the President of the EU Commission Jean-Claude Juncker despite his apparent conflict of interest in fighting tax havens. Regrettably, the Parliament has no legal means to sanction tax havens and hence depends fully on the EU Commission Initiative under the leadership of Juncker.
The fight against tax havens cannot be limited to tax rulings and tax evasion. The true scandal is legal tax dumping which is common practice across EU member states and endemic to the flawed architecture of the EU.
We are highly critical of the proposed mandate of the committee based on article 108 of TFEU. The EU state aid framework and competition policies hinder sovereign economic development, public investment and forward-looking industrial policy. Further, the state aid framework only provides for sanctions against tax rulings if they amount to a preferential treatment of specific corporations. Tax theft is perfectly compatible with competition law if Luxembourg and other tax havens granted the same tax privileges to all multinational corporations. A narrow harmonisation of the Consolidated Corporate Tax Base under the principles of the single market and competition law may even intensify tax competition when tax rates become more transparent across EU member states.
The Greens/EFA also selected the cooperation principle of article 4 of the TEU as a legal base for the committee of inquiry. It stipulates that pursuant to the principle of sincere cooperation, the Union and the Member States shall assist each other in carrying out tasks which flow from the Treaties. By choosing this legal basis, there's a clear option to take tax policy under the rule of competition. It may further amount to interpreting tax dumping as a violation the Stability and Growth Pact (SGP). We reject the socially and economically disastrous austerity regime which is inseparable from tax dumping. We would rather support an approach which addresses tax dumping on a cooperation basis. Hence, we would have preferred Cohesion Policy as enshrined in articles 3 (3) TEU and 174 (1 and 2) as a legal base while upholding our fundamental critique of the EU and its treaties.
The GUE/NGL will double efforts to broaden the scope of a committee of inquiry on taxation. We demand a true and effective response to tax dumping at the EU level and at the level of its member states. Nevertheless, it seems to us quite important to have an inquiry committee as it will enable us to have access both to non-public documents and additional human and economic resources that can help us do a proper inquiry job and not simply a sum of declarations as would be the outcome of an Initiative Report.