Activities of Herbert DORFMANN related to 2020/2258(INI)
Plenary speeches (1)
Reforming the EU policy on harmful tax practices (including the reform of the Code of Conduct Group) (debate)
Shadow reports (1)
REPORT on reforming the EU policy on harmful tax practices (including the reform of the Code of Conduct Group)
Amendments (22)
Amendment 8 #
Motion for a resolution
Recital A
Recital A
A. whereas harmful tax practices (HTP) refer to measures put in place by States to compete with other States via preferential tax regimes or tax incentivsince 1997 the Code of Conduct for Business Taxation (CoC) has been the EU’s primary instrument to prevent harmful tax measures; whereas harmful tax measures are defined in the CoC as measures (including administrative practices) which are isolated from the domestic economy, or tax advantages granted even in the absence of any real economic activity in their territory;ffect or may affect in a significant way the location of business activity in the Community, and which provide for a significantly lower level of taxation than those that generally apply in the Member State concerned1a; _________________ 1a COM(2009)201 final, p. 6.
Amendment 15 #
Motion for a resolution
Recital B
Recital B
B. whereas the EU has developed the concept of good governance in the tax area against harmful tax measures based on the Commission’s communication of 28.4.2009(COM(2009) 201) final; whereas anti-tax avoidance policies have led to a decline in preferential regimes all around the world, particularly in the Union; whereas new forms of HTP have emerged, notably through the transformation of preferential regimes into aggressive general regimes;
Amendment 23 #
Motion for a resolution
Recital C
Recital C
C. whereas "aggressive tax planning means the deliberate exploitation of loopholes and mismatches within and between national tax systems to artificially reduce the tax contribution of companies, particularly multinational corporations, to national tax systemsconsists in taking advantage of the technicalities of a tax system or of mismatches between two or more tax systems for the purpose of reducing tax liability” according to the European Commission recommendation of 6 December 2012;
Amendment 36 #
Motion for a resolution
Recital E
Recital E
E. whereas the CoC Group was efficient in deterring preferential tax regimes; whereas it has nonetheless failed to prevent aggressive tax competition between Member Statestax competition is legal and legitimate and in line with the EU Treaties and EU case law; whereas the CoC Group has contributed to prevent harmful tax competition between Member States in setting out principles for fair tax competition and determining whether a tax regime is harmful or not according to the Commission’s assessment in its communication of 15.7.2020; whereas the CoC Group remains of purely intergovernmental nature;
Amendment 53 #
Motion for a resolution
Paragraph 1
Paragraph 1
1. SWelcomes the significant actions at EU and international level to strengthen the principles on tax transparency, on fair tax competition, and on the absence of harmful tax measures and to ensure that they are respected; stresses that tax evasion and tax avoidance result in an unacceptable loss of substantial revenue for Member States; recalls the conservative estimates by the OECD on BEPS which costs around 4-10 % of global corporate income tax revenues, or USD 100-240 (EUR 84-202) billion annually26 ; recalls that Parliament’s estimates of corporate tax avoidance range from EUR 160 to 190 billion when both BEPS and other tax regimes are considered27 ; calls on the Commission and Member States to further increase their efforts in the area of tax good governance; _________________ 26 https://www.oecd.org/tax/beps/ 27Drover, R., Ferrett, B., Gravino, D., Jones, E. and Merler, S., Bringing transparency, coordination and convergence to corporate tax policies in the European Union, European Parliament, Directorate-General for Parliamentary Research, European Added Value Unit, 24 November 2015. Available at: https://www.europarl.europa.eu/RegData/et udes/STUD/2015/558773/EPRS_STU(201 5)558773_EN.pdf
Amendment 55 #
Motion for a resolution
Paragraph 1 a (new)
Paragraph 1 a (new)
1 a. Recalls that Member States are free to decide on the economic policy and in particular on their tax policies which they consider most appropriate; recalls, in this regard, that Member States need to exercise their competences consistently with Union law; shares the Commission’s observation outlined in its communication of15.7.2020 that “ whilst tax competition among countries is not problematic per se, there need to be common principles on the extent to which they can use their tax regimes and policies to attract businesses and profits”;
Amendment 63 #
Motion for a resolution
Paragraph 2
Paragraph 2
2. NHighlights that within Europe’s Social Market Economy adequate tax levels as well as simple and clear tax laws create jobs, improve Europe’s competiveness, and are the first line of defence against tax evasion and tax avoidance; notes the variety of EU instruments adopted to address HTP inside the Union, which include ATAD I and II, the Interest and Royalties Directive, the Parent Subsidiary Directive, the Directive on Administrative Cooperation in the Field of Taxation, and, in particular, DAC 3, 4 and 6 (on tax rulings, country-by-country reporting and mandatory disclosure rules for intermediaries), the various Commission recommendations to the Council, the CoC, and the Council recommendations in the framework of the European Semester dealing with aggressive tax planning; deplores, in this regard, the reluctance of Member States to better implement and apply EU laws and recommendations resulting often in self- caused less taxable revenue and higher costs to ensure compliance;
Amendment 71 #
Motion for a resolution
Paragraph 3
Paragraph 3
3. Welcomes the internal and external dimension of the work conducted by the CoC Group on HTP; notes that the external dimension of HTP is mainly dealt with by the CoC Group with the application of the ‘Fair Taxation’ criterion; deplores the lack ofcalls on the Commission to provide further information to assess the coherence between the criteria on HTP applied to Member States and the tougher criteria, in particular on economic substance, applied to third-country jurisdictions in the listing process;
Amendment 81 #
Motion for a resolution
Paragraph 4
Paragraph 4
4. RWelcomes that since 1997 the Code of Conduct for Business Taxation has been the EU’s primary instrument to prevent harmful tax competition; recalls that a Forum on Harmful Tax Practices (FHTP) was created within the OECD in 1998 with the task of monitoring and reviewing tax practices, and with a focus on the characteristics of preferential tax regimes; highlights that the FHTP evaluations have a determinant impact on the qualification of harmful regimes in the EU listing process;
Amendment 87 #
Motion for a resolution
Paragraph 5
Paragraph 5
5. WelcomesTakes note of the proposed Pillar II reform of the OECD/G20 Inclusive Framework on BEPS (Inclusive Framework), which aims to address remaining BEPS challenges and to set out rules giving jurisdictions a right to tax back where other jurisdictions have not exercised their primary taxing rights or the payment is otherwise subject to low levels of effective taxation, to combat harmful tax practices and impose an effective tax rate28 ; looks forward, in this regard, to a globally agreed consensus that is in line with European interests in simple and fair tax principles and standards; _________________ 28 OECD/G20 Base Erosion and Profit Shifting Project, Tax Challenges Arising from Digitalisation – Report on Pillar One Blueprint: Inclusive Framework on BEPS, OECD Publishing, Paris, 2020, p. 12. Available at: https://www.oecd.org/tax/beps/tax- challenges-arising-from-digitalisation- report-on-pillar-two-blueprint.pdf
Amendment 94 #
Motion for a resolution
Paragraph 6
Paragraph 6
6. Welcomes the fact that the proposalnew momentum in G20/OECD IF negotiations created by the US administration’s recent proposals on a ‘strong incentive for nations to join a global agreement that implements minimum tax rules worldwide’ put forward by the US Administration for ‘The Made in America Tax Plan’ could facilitate a deal on Pillar II by mid-2021;
Amendment 106 #
Motion for a resolution
Paragraph 7
Paragraph 7
7. Calls for the current scope of the CoC to be progressively updated in order to look into the general characteristics of a tax system to determine whether they havecontain harmful effectmeasures;
Amendment 114 #
Motion for a resolution
Paragraph 8
Paragraph 8
8. Calls for the adoption of a definition of ‘minimum level of economic substance’, preferably based on a formulaic approach, and which would evolve progressively as reported income increases, which could be used to assess whether a tax regime is potentially harmful; highlights the economic substance requirement already included in the EU list’s ‘Fair Taxation’ criterion; according to the global standard of the OECD and in follow-up work related to BEPS Action 5 1a, highlights the economic substance requirement already included in the EU list’s ‘Fair Taxation’ criterion; _________________ 1aOECD (2018): Resumption of Application of Substantial Activities Factor to No or only Nominal Tax Jurisdictions, OECD, Paris. https://www.oecd.org/tax/beps/resumption -of-application-of-substantial-activities- factor.pdf
Amendment 131 #
Motion for a resolution
Paragraph 10
Paragraph 10
10. Notes that the Commission recognises that a future minimum global taxation standard would have to be integrated into the EU actions on fair tax competition, and that if no consensus is found at global level on such a standard, it should nonetheless be included in the CoC29 ; calls on the Commission to already assess the legislative proposals that will be necessary to implement Pillar II at Union level, including a revision of ATAD and of the Interest and Royalties Directive, and the reform of the CoC and of the criteria in the EU listing of non-cooperative jurisdictions; calls,in this regard, on the Commission to guarantee that the implementing rules on a minimum effective rate will be designed without excessive compliance costs, especially for SMEs; _________________ 29 COM(2020)0313.
Amendment 137 #
Motion for a resolution
Paragraph 10 a (new)
Paragraph 10 a (new)
10 a. Takes note of the Commission‘s Communication on Business Taxation for the 21st Century; takes note of this new attempt to provide for a fair and sustainable business environment and EU tax system by introducing a new framework for business taxation (BEFIT) to replace the proposal fora Common Consolidated Corporate Tax Base (the CCCTB); is concerned by the lack of a clear strategy to ensure the new framework for business taxation in Europe will achieve support from the Member States;
Amendment 146 #
Motion for a resolution
Paragraph 11
Paragraph 11
11. Insists that the future implementation of new EU tools against HTP should prioritise the recourse to legislativappropriate instruments and explore the provisions of the TFEU allowing decision- making to be facilitated, such as qualified majority voting;
Amendment 174 #
Motion for a resolution
Paragraph 14
Paragraph 14
14. Highlights the non-binding nature of the CoC; deplores the fact that Member States could maintain a harmful regime without facing any repercussions; at the CoC is a soft law instrument; takes note of the fact that Member States within the CoC operate on the basis of peer review and peer pressure between themselves;
Amendment 187 #
Motion for a resolution
Paragraph 15
Paragraph 15
15. Calls for a revision of the criteria, the governance and the scope of the CoC through a legally bindingrevised instrument that should replace the current intergovernmental arrangemcan be applied more transparentsly and allow for a transition to qualified majority votingeffectively; requires that Parliament be included in the process of designing and adopting new policies and criteria to combat HTP;
Amendment 195 #
Motion for a resolution
Paragraph 16
Paragraph 16
16. Considers the reform of the criteria of the CoC to be a matter of urgency and that it should assess all regimes proposing a tax rate below the future internationally agreed minimum effective tax rate in the framework of Pillar II of the Inclusive Framework as being potentially harmful, unless the revenues qualifying for a deduction or a reduced tax rate comply with robust and progressive economic substance requirementsweighing up harmful and fair tax competition knowing that tax competition is a legal and legitimate means in line with the EU Treaties and EU case law;
Amendment 200 #
Motion for a resolution
Paragraph 16 a (new)
Paragraph 16 a (new)
16 a. Recalls that the COVID-19 pandemic has plunged Europe’s economy into its deepest recession in modern times, with just recent signs of recovery; recalls, that as part of their response to the COVID-19pandemic, governments across the EU were quick to introduce tax measures to provide liquidity to both businesses and households1a resulting in lower tax revenues for Member States; calls for business taxation to be a tool to support recovery through simple, stable and SME-friendly tax rules that do not hamper the economic recovery by introducing excessive tax measures; _________________ 1aEuropean Commission, Annual Report on Taxation 2021
Amendment 206 #
Motion for a resolution
Paragraph 17
Paragraph 17
17. Urges an enlargement of the scope of the CoC, notably by including preferential personal income or capital tax regimes, or personal income and wealth tax regimes that could lead to significant Single Market distortionSupports the Commission’s intention as outlined inits communication of 15.7.2020 to widening the scope of the code to cover further types of regimes and general aspects of the national corporate tax systems as well as relevant tax and to cover special citizenship schemes or measures to attract expatriates or wealthy individuals;
Amendment 216 #
Motion for a resolution
Paragraph 18
Paragraph 18
18. Requires that the CoC Group appear at least once a year before ParliamentWelcomes the exchange of views with Lyudmila Petkova, chair of the CoC Group, on 19April 2021 and invites the chair to continue this positive practice;