Labour MEPs back report calling for tough sanctions on tax havens

Labour MEPs voted today for a report that calls for a series of measures designed to fight tax evasion by multinational companies. The report was approved by an overwhelming majority in the European Parliament, although Conservative MEPs abstained on the measures.

One of the main proposals in the report is for national governments to have the right to tax profits which have been generated by shell companies in countries with a tax rate of less than 15 per cent. This measure builds on recommendations from the OECD for when companies cannot prove this profit was generated through genuine business activity.

The report also calls for a Common Consolidated Corporate Tax Base (CCCTB) that sets out rules that companies operating in the EU would use to calculate profits. It ensures companies pay the right amount of tax in the country that the profits are generated, instead of paying tax in whichever country has the lowest tax rate.

Anneliese Dodds MEP, Labour’s European Parliament spokesperson on taxation, said:

“Today’s report is yet another shining example of the good work the EU does to build a common approach to tackling tax avoidance and evasion. Tax avoidance does not respect national boundaries and only by working with our fellow EU countries can we effectively close the loopholes created by the lack of a common approach.

“The EU has proposed bold and ambitious reforms to tackle tax evasion and aggressive tax avoidance – from stopping national governments cooking up sweetheart deals for particular companies, to drawing up a blacklist of tax havens and sanctioning the companies who use them, to making large multinational companies publish exactly where they make their profits and where they pay their taxes.

“The EU is a global leader when it comes to this kind of work. Anyone who cares about tax justice, and who wants to see multinational companies pay their fair share and ease the burden on smaller businesses and public services, should want us to stay in the EU – because that is where the fight is really taking place.”