Activities of Niels FUGLSANG related to 2021/2074(INI)
Shadow reports (1)
REPORT on the impact of national tax reforms on the EU economy
Amendments (39)
Amendment 1 #
Motion for a resolution
Citation 3 a (new)
Citation 3 a (new)
— having regards to the Communication From The Commission To The European Parliament And The Council, 'An Action Plan For Fair And Simple Taxation Supporting The Recovery Strategy' COM(2020) 312 final,
Amendment 3 #
Motion for a resolution
Citation 3 b (new)
Citation 3 b (new)
Amendment 8 #
Motion for a resolution
Citation 3 c (new)
Citation 3 c (new)
— having regards to country-specific recommendations and Commission’s assessments of the substance of the recovery and resilience plans in the framework of the European Semester and the Recovery and Resilience Facility,
Amendment 9 #
Motion for a resolution
Citation 3 d (new)
Citation 3 d (new)
— having regards to the conclusions of the ECOFIN Council Meeting on 1 December 1997 concerning taxation policy - Resolution of the Council and the Representatives of the Governments of the Member States, meeting within the Council of 1 December 1997 on a code of conduct for business taxation - Taxation of saving,
Amendment 11 #
Motion for a resolution
Citation 3 e (new)
Citation 3 e (new)
— having regards to the Code of Conduct Group's (Business Taxation) Overview of EU Member States' preferential tax regimes examined since the creation of the COCG in March 1998 (8602/1/20 REV 1),
Amendment 14 #
Motion for a resolution
Citation 3 f (new)
Citation 3 f (new)
— having regards to its resolution of 7 October 2021 on reforming the EU policy on harmful tax practices (including the reform of the Code of Conduct Group),
Amendment 15 #
Motion for a resolution
Citation 5 a (new)
Citation 5 a (new)
— having regard to the resolution of the European Parliament on the implementation of the EU requirements for exchange of tax information: progress, lessons learnt and obstacles to overcome (2020/2046(INI)),
Amendment 24 #
Motion for a resolution
Recital A
Recital A
A. whereas the issue of harmful tax practices iwas debated in the report of its Committee on Economic and Monetary Affairs of 21 July 2021Parliament's resolution on reforming the EU policy on harmful tax practices (including the reform of the Code of Conduct Group);
Amendment 30 #
B. whereas although tax policy largely remains a Member State responsibility, the single market requires a minimum degree of coordination in setting tax policy1 whereas national measures impact tax collection of other Member States and can have a distortive effect on both fair competition and investments; _________________ 1 As laid down in Articles 110-118 TFEU.
Amendment 34 #
Motion for a resolution
Recital B a (new)
Recital B a (new)
Amendment 35 #
Motion for a resolution
Recital C
Recital C
C. whereas tax policy fragmentation creates various obstacles for companies and citizens in the single market, including legal uncertainty, red tape, the risk of double taxation and difficulties claiming tax refunds; whereas these obstacles discourage cross-border economic activity in the single market; whereas policy fragmentation also creates risks for tax authorities such as double non-taxation and arbitrage possibilities (such as aggressive tax planning); whereas some tax loopholes between Member States legislations, or between Member States and third countries, have been exploited as tax avoidance schemes;
Amendment 43 #
Motion for a resolution
Recital D
Recital D
D. whereas within the EU’s social market economy, adequate tax levels and simple and clear tax laws should not distort economic actors’ decision-making; whereas sound tax policies should support the creation of jobs and economic growthfulfilment of policy objectives stated in Art. 3 of the TEU, including full employment, sustainable growth, social progress and improve the competitiveness of the EU and its Member States;
Amendment 49 #
Motion for a resolution
Recital D a (new)
Recital D a (new)
D a. whereas the weighted average statutory corporate income tax rate in OECD countries has declined from 46.52 % in 1980 to 25.85 % in 2020, representing a 44 % reduction in the past 40 years;
Amendment 54 #
Motion for a resolution
Recital E
Recital E
E. whereas the overall level of taxation (understood as taxes and compulsory actual social contributions) differs considerably between Member States, as demonstrated by the fact that the tax-to-GDP ratio varied between 22.1 % in Ireland and 46.1 % in Denmark in 20192 ; whereas on aggregate, the tax burden in the EU (40.1 %) is high even wheer than csompared toe other advanced economies (the Organisation for Economic Co-operation and Development (OECD) average was 34.3 % in 2018); _________________ 2Commission Annual Report on Taxation 2021, p. 24.
Amendment 56 #
Motion for a resolution
Recital E a (new)
Recital E a (new)
E a. whereas some MNEs have market values above Member States’ GDP and are thus as economically resourceful as some Member States;
Amendment 57 #
Motion for a resolution
Recital E b (new)
Recital E b (new)
E b. whereas many business models do not require physical infrastructure in order to carry out transactions with customers and make profits, allowing some multinational digital companies to pay taxes of close to zero on their revenue made in the EU; whereas these companies have a massive impact on EU consumers and the internal market but contribute close to nothing to Member States' public revenue;
Amendment 58 #
Motion for a resolution
Recital E c (new)
Recital E c (new)
E c. whereas the OECD/G20 Inclusive Framework on BEPS agreed on a two- pillar reform of the international tax system to address the challenges arising from the digitalisation of the economy, including a minimum effective corporate tax rate of 15 %;
Amendment 73 #
Motion for a resolution
Paragraph 1
Paragraph 1
1. Recalls that Member States are free to decide on their own economic policies and in particular their own tax policies; recalls, however, that Member States must exercise this competence consistently with Union law; Reminds about the existence of the Art. 116 TFEU;
Amendment 85 #
Motion for a resolution
Paragraph 3
Paragraph 3
3. Highlights that differences in national tax regimes present obstacles to SMEs trying to operate across borders; stresses that compared to multinational enterprises, SMEs have fewer resources to spend on tax compliance and tax optimisationwhile MNEs can engage into aggressive tax planning; points out that the share of expenditure used for tax compliance purposes is higher for SMEs than for multinational enterprises; recalls that some Member States has developed schemes that would tax profits made in an international context at a lower rate than the national nominal rate, thus putting SMEs at a competitive disadvantage3a; _________________ 3a https://ec.europa.eu/commission/presscor ner/detail/en/IP_19_5578
Amendment 104 #
Motion for a resolution
Paragraph 5 a (new)
Paragraph 5 a (new)
5 a. Notes that MNEs are the economic entities benefiting the most from the economic advantages of the Single Market; considers it essential to restore fair competition between SMEs and MNEs and therefore requests the Commission to assess the feasibility of a Single Market Levy;
Amendment 115 #
Motion for a resolution
Paragraph 6 a (new)
Paragraph 6 a (new)
6 a. Recognises the positive impact of the Country Specific Recommendations in fostering needed tax reforms in those Member States that received recommendation on aggressive tax planning such as reforms on conditional withholding taxes on royalty and interest payments in case of abuse or payments to low-tax jurisdictions; regrets that some Member States have not yet,addressed the CSR on tax;
Amendment 118 #
Motion for a resolution
Paragraph 6 b (new)
Paragraph 6 b (new)
6 b. Considers the CSR on tax a powerful tool; understands that in the Framework of the Resilience and Recovery plan, the Commission is also assessing how Member States intend to tackle aggressive tax planning; however regrets the disappearance of the assessment of Member States' tax features that can facilitate aggressive tax planning;
Amendment 120 #
Motion for a resolution
Paragraph 7
Paragraph 7
7. Highlights that the ideal level for tax policy coordination is on the international stage through the G20/OECD; notes that EU tax proposals based on international agreements have historically been more likely to be adopted by the Council; urges the Commission and Member States to work together and ensure the transposition into EU law of the Inclusive Framework agreement on the two Pillars as announced by the President of the Commission in its State of the Union Letter of Intent 2021; recognises that the economic integration of the EU requires more coordination than other economic areas; notes that when translating the BEPS 15 Action of the Base Erosion and Profit Shifting project from OECD/G20, the EU went further in adding Controlled Foreign Company Rules into the Anti-Tax Avoidance Directive;
Amendment 125 #
Motion for a resolution
Paragraph 7
Paragraph 7
7. Highlights that the ideal level for tax policy coordination is on the international stage through the G20/OECD; notes that EU tax proposals based on international agreements have historically been more likely to be adopted by the Council; encourages, in that regard, Member States to push for similar international agreements that address the race to the bottom environment in capital gains taxes and personal income taxes for highly mobile individuals;
Amendment 126 #
Motion for a resolution
Paragraph 7
Paragraph 7
7. Highlights that the ideal level for tax policy coordination is on the international stage through the G20/OECDmanaged to achieve significant results in recent years; notes that EU tax proposals based on international agreements have historically been more likely to be adopted by the Council;
Amendment 130 #
Motion for a resolution
Paragraph 7 a (new)
Paragraph 7 a (new)
7 a. Notes the withdrawal of the proposal for a Common Consolidated Corporate Tax Base; urges the Commission to put forward a detailed proposal of a single corporate tax rulebook for the EU in the framework of BEFIT;
Amendment 139 #
Motion for a resolution
Paragraph 9
Paragraph 9
9. Notes that digitalisation and a heavy reliance on intangible assets that pose challenges to the current tax system warrant a high degree of policy coordination; deplornotes the fact that some Member States have pressed ahead with the introduction of national digital taxes despite ongoing negotiations at EU and OECD levels; stresses that these national measures should be phased out following the implementation of an effective international solution; reminds that the EU agreed to a digital levy as part of the own resources to finance the Next Generation EU recovery instrument and urges the Commission to come forward with alternative proposals that will be compatible with the international commitment;
Amendment 151 #
Motion for a resolution
Paragraph 10
Paragraph 10
10. Deplores the debt equity bias in corporate taxation that allows for generous tax deductions on interest payments, while equity financing costs cannot be deducted in a similar manner; highlights the structural disadvantage facing companies that rely on equity financing, which are oftenespecially if they are young and small companies with poor access to credit;
Amendment 155 #
Motion for a resolution
Paragraph 11
Paragraph 11
11. Notes that debt equity bias varies considerably between the Member States; welcomnotes the fact that some Member States have introduced allowances for corporate equity to address this issue; stresses that a common European approach would be preferable in order to avoid distortions in the single market; recalls that part of such allowances for corporate equity have proven to be exploited as tax loopholes allowing MNEs to artificially deduct national interests; stresses that a common European approach would be preferable in order to avoid distortions in the single market; reminds that such bias can be tackled by either allowing for new deduction of costs related to equity financing or by reducing the interest deduction possibilities; recalls the Parliament’s proposal to limit the deduction of exceeding borrowing costs to up to 20 % of the taxpayer's earnings before interest, tax, depreciation and amortisation (EBITDA) while the Council adopted a higher threshold of up to 30%1a; recalls that, according to the OECD, a ratio of 30 % may be too high to be effective in preventing base erosion and profit shifting1b; _________________ 1aEuropean Parliament legislative resolution of 8 June 2016 on the proposal for a Council directive laying down rules against tax avoidance practices that directly affect the functioning of the internal market (COM(2016)0026 – C8- 0031/2016 – 2016/0011(CNS)) 1b OECD, Public Discussion Draft BEPS ACTION 4: INTEREST DEDUCTIONS AND OTHER FINANCIAL PAYMENTS, 2014
Amendment 160 #
Motion for a resolution
Paragraph 12
Paragraph 12
12. Looks forward to the Commission’s proposal for a debt equity bias reduction allowance5 ; urges the Commission to incorporate strong anti-avoidance provisions to avoid any allowance on equity to be used as a new tool for base erosion; _________________ 5Commission communication of 18 May 2021 on business taxation for the 21st century (COM(2021)0251).
Amendment 165 #
Motion for a resolution
Paragraph 13
Paragraph 13
13. Notes that the effective marginal tax rate (EMTR) is often a decisivecan be a factor for corporations making investment decisions, together with the quality of infrastructure, the availability of an educated, healthy workforce, and stability13a; notes that there is considerable variation in the EMTR across Member States; invites the Commission to look into whether some Member States are distorting competition by artificially lowering their EMTR, e.g. through accelerated depreciation schedules or adjusting the tax deductibility of certain items;, and to communicate its results to the Parliament; _________________ 13a Klaus Schwab, World Economic Forum, The Global Competitiveness Report 2019
Amendment 166 #
Motion for a resolution
Paragraph 13
Paragraph 13
13. Notes that the effective marginal tax rate (EMTR) is often a decisive factor for corporations making investment decisions; notes that there is considerable variation in the EMTR across Member States; invites the Commission to look into whether some Member States are distorting competition by artificially lowering their EMTR, e.g. through accelerated depreciation schedules or adjusting the tax deductibility of certain items; highlights that, under Art. 116 TFEU, market distortions caused by national legal provisions can be eliminated through an ordinary legislative procedure;
Amendment 173 #
Motion for a resolution
Paragraph 14
Paragraph 14
14. Highlights that tax incentives for private research and development (e.g. via tax credits, enhanced allowances or adjusted depreciation schedules) can help to lift an economy’s overall spending towards research and development, which often comes with positive externalities; is concerned, however, that certain types of tax incentives such as patent box / intellectual property box regimes do little to increase research and development spending and may actually distort the single market; recommends incentives that target input of innovation rather than output, meaning incentives that are costs- based and not profit-based;
Amendment 178 #
Motion for a resolution
Paragraph 15
Paragraph 15
15. Stresses that further harmonisation regarding tax incentives for research and development spending may be warranted; notes that that this was part of the Commission’s initial common corporate tax base proposal; deplores the fact that the topic was not addressed in the recent communication on business taxation for the 21st century; demands the Commission to propose guidelines on tax incentives that are not distortive for the Single Market, notably by favouring incentives that are cost-based, limited in time, regularly assessed, and repealed in case of no positive impact, limited in geographical scope and rather partial than full exemptions;
Amendment 180 #
Motion for a resolution
Paragraph 15 a (new)
Paragraph 15 a (new)
Amendment 185 #
Motion for a resolution
Paragraph 15 a (new)
Paragraph 15 a (new)
15 a. Considers that tax certainty would be reinforced if Member States had a common understanding of what tax incentives are not distortive; calls the Commission to issue guidelines on tax incentives that are not distortive for the Single Market;
Amendment 190 #
Motion for a resolution
Paragraph 15 b (new)
Paragraph 15 b (new)
15 b. Asks the Commission to follow up and monitor new national tax reforms or measures implemented as a result of the pandemic to sustain the economy, especially those measures that were not temporary;
Amendment 205 #
Motion for a resolution
Paragraph 16
Paragraph 16
16. Takes note ofWelcomes the Commission’s ongoing work on an EU taxation scoreboard and calls on the Commission to inform Parliament about its political intentions a; recommends the possible financial implications of this systemrecourse to economic indicators that will allow for the identifications of distortion of the Single Market, such as the levels of FDI, royalties and interests payments; suggests that such work allows for the establishment of enhanced country specific recommendations to Member States that would help ensure well coordinated tax policies across the EU;
Amendment 206 #
Motion for a resolution
Paragraph 16
Paragraph 16
16. Takes note of the Commission’s ongoing work on an EU taxation scoreboard and calls on; highlights that such tool must contribute to the fight against tax competition; urges the Commission to inform Parliameduly take into abccount its political intentions and the possible financial impthe massive public revenue losses imposed by national tax policies that are facilictations of this systemng tax avoidance;