EU committee set to probe states’ tax deals

A committee of 45 members of the European Parliament plans to trawl back through more than two decades of national tax agreements with big companies.

The special committee was voted for by an overwhelming majority of members of the Parliament following the LuxLeaks revelations and the ongoing investigation by the European Commission into tax rulings.

Ireland’s Brian Hayes, one of 45 substitute members, said he believes it could be good for Ireland in that it will make MEPs realise Ireland has made big changes to its tax policy while exposing the hypocrisy of other countries’ tax deals.

The committee has been given an initial six months to carry out its investigation. Many members hope it will be able to demand documents and to question finance ministers and companies about their tax arrangements.

However Mr Hayes said they will have no powers to compel witnesses to testify and that countries may decide that tax is a national competence and refuse to co-operate.

As well as looking into tax ruling practices from January 1991, it will review how the European Commission treats state aid in member states and the extent to which they are transparent about their tax rulings.

It will also try to calculate the negative effect of aggressive tax planning on public finances and produce recommendations for the future.

The chair of the committee will be the well respected French MEP Alain Lamassoure, a member of the centre right EPP group, who initially was against establishing the investigation. There were reports that some MEPs had questions about his role in company tax when he was French Budget Minister in the 1990s.

The left-leaning Green group in the Parliament has been pushing for an investigation into tax evasion and dumping for some time but the bigger groups — the EPP, Socialists, Liberal ALDE and the ECR— blocked it.

But when the Greens got the support of 25% of MEPs — including Ireland’s Sinn Féin and independent MEPs – the big groups were forced to consider it, but downgraded it to a special committee with lesser powers of investigation.

The Greens economic and finance spokesperson, German MEP Sven Giegold said: “We will make sure that the special committee aggressively investigates those who are behind and have profited from aggressive tax practices in Europe. Citizens have a right to know how corporations have avoided their tax responsibility with the complicity of EU governments”.

The committee will need access to key documents from member states and will need to be able to call members of big corporations and current or former finance ministers, he said. He acknowledged this will need the support of all political groups, which may not be forthcoming.

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