Tory MEPs vote against EU action to tackle tax fiddling

Conservative MEPs have voted against a crackdown on tax evasion and aggressive tax avoidance across the EU.

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

“Today in Westminster, George Osborne claimed £5 billion would come from ‘measures on tax avoidance, evasion and imbalances’, and said £800 million would be invested ‘in the fight against tax evasion’ – yet in Strasbourg, his MEPs have voted against EU measures to fight tax dodging.

“At a time when Tory ministers are telling the public to tighten their belts with austerity, it is astonishing that Tory MEPs have voted against a report that can help stop big business from fiddling their tax responsibilities.”

Labour MEPs backed the proposals, which will ensure large multinationals in Europe pay their taxes in the countries where they make their profits, measures that reflect the large public appetite for companies to pay their fair share of tax.

The report calls on multinational companies in Europe to publish information on their profits, taxes and activities in every country in which they operate. Labour MEPs have been calling for this measure for years, as it will allow governments and citizens alike to see where multinationals make their money and where they pay their taxes.

It also calls for greater action to be taken against tax havens, by agreeing a common definition of the term and then applying sanctions against those companies which make use of them in order to avoid paying tax.

Anneliese Dodds MEP added:

“Today’s vote by MEPs is a huge step forward in the campaign for tax justice and towards reclaiming some of the £9 billion lost every year through tax avoidance and evasion in the UK alone. Just imagine how many schools and hospitals that money could build.

“This report will bring in extra protection for whistle-blowers who speak out against tax-dodging companies and strengthen sanctions for those breaking the rules. The British public have long fought for a fairer tax system and it is time for the EU – and especially the Tory government – to listen to their people and stop companies fiddling their tax.”

Neena Gill MEP, member of the European Parliament economic and monetary affairs committee, said:

“These recommendations are a signal to national governments to should stop using their tax policy as an incentive to attract foreign investors.

“Of course, the real test comes next year: how serious are Conservative MEPs and Osborne’s government on tax transparency and fairness when it comes to legislation? By voting against the measures today, the Tories have made their position crystal clear.

“Although we are hopeful when we see the overall support this report has received, we should not be deluded: companies will always try to get away with paying the least amount of tax they can.

“Furthermore, the Commission must urgently review EU legislation on audit companies. We need greater transparency, increased cooperation and political will to make a crackdown on tax evasion and aggressive tax avoidance a reality.”