2022/2080(INI) Lessons learnt from the Pandora Papers and other revelations
Lead committee dossier:
Progress: Awaiting committee decision
Role | Committee | Rapporteur | Shadows |
---|---|---|---|
Lead | ECON | FUGLSANG Niels ( S&D) | DORFMANN Herbert ( EPP), KELLEHER Billy ( Renew), CARÊME Damien ( Verts/ALE), MOŻDŻANOWSKA Andżelika Anna ( ECR) |
Committee Opinion | DEVE | BULLMANN Udo ( S&D) | Michèle RIVASI ( Verts/ALE), Miguel URBÁN CRESPO ( GUE/NGL), Beata KEMPA ( ECR), Frances FITZGERALD ( PPE) |
Committee Opinion | LIBE | CARÊME Damien ( Verts/ALE) | Paul TANG ( S&D), Ramona STRUGARIU ( RE) |
Lead committee dossier:
Legal Basis:
RoP 54
Legal Basis:
RoP 54Subjects
Events
2022/10/14
EP - Committee draft report
Documents
2022/10/10
EP - CARÊME Damien (Verts/ALE) appointed as rapporteur in LIBE
2022/07/07
EP - Committee referral announced in Parliament
2022/04/19
EP - BULLMANN Udo (S&D) appointed as rapporteur in DEVE
2022/03/17
EP - FUGLSANG Niels (S&D) appointed as rapporteur in ECON
Documents
- Committee draft report: PE735.471
- Committee draft report: PE735.471
Activities
- Malin BJÖRK
Plenary Speeches (0)
- Udo BULLMANN
Plenary Speeches (0)
- Fabio Massimo CASTALDO
Plenary Speeches (0)
- Angel DZHAMBAZKI
Plenary Speeches (0)
- Marcel de GRAAFF
Plenary Speeches (0)
- Heidi HAUTALA
Plenary Speeches (0)
- Piernicola PEDICINI
Plenary Speeches (0)
- Stanislav POLČÁK
Plenary Speeches (0)
- Pirkko RUOHONEN-LERNER
Plenary Speeches (0)
- Alfred SANT
Plenary Speeches (0)
- Paul TANG
Plenary Speeches (0)
- Gunnar BECK
Plenary Speeches (0)
- José GUSMÃO
Plenary Speeches (0)
- Ivan Vilibor SINČIĆ
Plenary Speeches (0)
- Ramona STRUGARIU
Plenary Speeches (0)
- Mick WALLACE
Plenary Speeches (0)
- Frances FITZGERALD
Plenary Speeches (0)
- Andżelika Anna MOŻDŻANOWSKA
Plenary Speeches (0)
- Marek BELKA
Plenary Speeches (0)
- Antoni COMÍN I OLIVERES
Plenary Speeches (0)
- Claude GRUFFAT
Plenary Speeches (0)
Amendments | Dossier |
69 |
2022/2080(INI)
2022/10/21
DEVE
69 amendments...
Amendment 1 #
Draft opinion Recital A (new) A. whereas parties to the Addis Ababa Action Agenda of the Third International Conference on Financing for Development committed to enhance revenue administration through modernized, progressive tax systems, more efficient tax collection, as well as to scale up international tax cooperation;
Amendment 10 #
Draft opinion Paragraph -1 a (new) -1a. Emphasises that Illicit Financial Flows is a matter of global governance; urges the EU to show strong political will and determination against tax avoidance and evasion, in line with the principle of Policy Coherence for Development, as enshrined in article 208 of the Lisbon Treaty;
Amendment 11 #
Draft opinion Paragraph 1 1. Denounces the existence of
Amendment 12 #
Draft opinion Paragraph 1 1. Denounces the existence of a shadowy offshore financial system with offices all over the world, which is allowing enrichment at the public’s expense; regrets that, despite a decade of tax scandals and legislative reforms in the EU, the Pandora Papers reveal that there has been insufficient progress at global level to rein in corporate secrecy and offshore tax evasion and avoidance; recalls that corporate ownership secrecy is used to hide personal financial interests;
Amendment 13 #
Draft opinion Paragraph 1 1. Denounces the existence of a shadowy offshore financial system with offices all over the world, which is allowing enrichment at the public’s expense; stresses that the lack of transparency, including international information sharing, is a key underlying cause of tax-related illicit financial flows;
Amendment 14 #
Draft opinion Paragraph 1 1. Denounces the existence of a shadowy offshore financial system with offices all over the world, which is allowing illicit enrichment by facilitating tax evasion, providing means for money laundering and bringing about financial instability at the public’s expense;
Amendment 15 #
Draft opinion Paragraph 1 1. Denounces the existence of a shadowy offshore financial system with offices all over the world, which is allowing enrichment of already most powerful and richest at the public’s expense;
Amendment 16 #
2. Emphasises that the practices brought to light by the Pandora Papers
Amendment 17 #
Draft opinion Paragraph 2 2. Emphasises that the practices brought to light by the Pandora Papers revelations have a severe impact on the fiscal space of developing countries; recalls that tax avoidance by wealthy individuals and corporations shifts the tax burden from larger businesses to smaller and medium-sized businesses that do not have the resources to access similar sophisticated tax planning arrangements. It also shifts the tax burden onto consumption through personal income tax and value-added tax, which is particularly problematic in LDCs where small, medium and micro-enterprises (SMMEs) and informal traders make up the bulk of economic activity and are more vulnerable to significantly reduced income and insecurity;
Amendment 18 #
Draft opinion Paragraph 2 2. Emphasises that the practices brought to light by the Pandora Papers revelations have a severe impact on the fiscal space of developing countries and severely undermine the Rule of Law and institutional resilience in these countries, which is an essential precondition to achieve sustainable development;
Amendment 19 #
Draft opinion Paragraph 2 2. Emphasises that the practices brought to light by the Pandora Papers revelations have an especially severe impact on the fiscal space and public expenditure of developing countries;
Amendment 2 #
Draft opinion Recital B (new) B. whereas global tax competition has resulted in a shift of the tax burden to workers and low-income households; has impinged upon the possibility of developing countries to enhance domestic resource mobilisation and has forced damaging cutbacks in public services in poor countries;
Amendment 20 #
Draft opinion Paragraph 2 a (new) 2a. Welcomes that the EU listing of non-cooperative tax jurisdictions for tax purposes has enabled better legislation and tax practices in some developing countries through technical cooperation and political dialogue to address identified tax issues; notes, however, that the EU list of non-cooperative tax jurisdictions excludes tax havens in Europe as well as many tax havens outside Europe, which affects the credibility of the listing process due to a lack of policy coherence; calls on the Council to coherently list all the countries that qualify as tax havens in the EU listing of non-cooperative jurisdictions for tax purposes;
Amendment 21 #
Draft opinion Paragraph 2 a (new) 2a. Recalls the broad consensus in connection with the adoption of the UN’s Agenda 2030 with the Sustainable Development Goals on the need to fundamentally increase investments to boost sustainable growth and “go from billions to trillions” in financing for development through the mobilisation of private capital;
Amendment 22 #
Draft opinion Paragraph 2 a (new) 2a. Condemns the decision of the Council from 5 October 2021 to remove Anguilla, Dominica, and the Seychelles from the EU list of non-cooperative jurisdictions for tax purposes, which impacts the EU’s fight for a globally transparent tax system and therefore urges the Council to reconsider its decision;
Amendment 23 #
Draft opinion Paragraph 2 a (new) 2a. Highlights the international commitment to significantly reduce illicit financial flows by 2030, as contained in the Addis Ababa Action Agenda and the 2030 Agenda for Sustainable Development;
Amendment 24 #
Draft opinion Paragraph 2 b (new) 2b. Points out that the EU Code of Conduct Group recommends that EU Member States impose defensive measures against blacklisted jurisdictions, including the denial of the deductible character of costs and payments when these are treated as directed to entities or persons in a blacklisted jurisdiction, the inclusion in the taxpayer company's tax base of the income of an entity resident or a permanent establishment situated in a blacklisted jurisdiction, the application of a withholding tax at a higher rate on payments when these are treated as received in blacklisted jurisdictions, and the exclusion of the deduction of profits and dividends when these are treated as received from a blacklisted jurisdiction; reminds that the recommendations of the EU Code of Conduct Group were adopted by the Council in 2019; calls on all Member States to enact appropriate legislative acts that ensure the effective application of all the defensive measures recommended by the EU Code of Conduct Group against blacklisted jurisdictions and the undertakings that take advantage of their existence to do business; recommends that Member States apply a reversal of the burden of proof and special documentation requirements in such legislative acts to reinforce the effect of the defensive measures that they apply;
Amendment 25 #
Draft opinion Paragraph 2 b (new) Amendment 26 #
Draft opinion Paragraph 2 c (new) 2c. Stresses that, while listing and defensive measures need to be applied without hesitation where appropriate, the EU needs to engage in more systemic transparent cooperation and consultation procedures with developing countries that do not have appropriate tax practices before applying any coercive measures, especially with regard to ensuring that knowledge and capacity-building opportunities have been previously provided to the authorities of these countries;
Amendment 27 #
Draft opinion Paragraph 3 3. Considers that tax avoidance
Amendment 28 #
Draft opinion Paragraph 3 3. Considers that tax avoidance by multinationals and the existence of tax havens offering no or extremely low effective tax rates are heavily detrimental to the fair collection of tax
Amendment 29 #
Draft opinion Paragraph 3 3. Considers that tax avoidance by multinationals and the existence of tax havens offering no or extremely low effective tax rates are heavily detrimental to the fair collection of tax in countries in the Global South
Amendment 3 #
Draft opinion Recital C (new) C. whereas Corporate Income Tax represents a higher share of tax revenues and GDP in developing countries than in rich countries; whereas in developing countries, losses due to global corporate taxation are estimated to range from 6 to 13 per cent of total tax revenue, versus 2 to 3 per cent in OECD countries[1]; [1] UNCTAD report (p.12) https://unctad.org/system/files/official- document/aldcafrica2020_en.pdf
Amendment 30 #
Draft opinion Paragraph 3 3. Considers that tax avoidance by multinationals and the existence of tax havens offering no or extremely low effective tax rates are heavily detrimental to the fair collection of tax in countries in the Global South; stresses that tax evasion causes developing countries to lose more money each year than the total amount of aid they receive and represents another way of extracting resources from the Global South to the richest countries, deepening the gap between the two and the processes of global south impoverishment;
Amendment 31 #
Draft opinion Paragraph 3 3.
Amendment 32 #
Draft opinion Paragraph 3 3. Considers that tax avoidance by multinationals, as well as by some of the world’s richest and most powerful people, including current and former presidents, prime ministers and heads of state, and the existence of tax havens offering no or extremely low effective tax rates are heavily detrimental to the fair collection of tax in countries in the Global South;
Amendment 33 #
Draft opinion Paragraph 3 a (new) 3a. Stresses that the digitalization of the economy has exacerbated existing problems relating to corporate tax avoidance and evasion, and the importance of ensuring fair and effective taxation of digital services;
Amendment 34 #
Draft opinion Paragraph 3 a (new) 3a. Is of the opinion that the EU should ban any financial activity of its companies or its citizens with the banks established in blacklisted tax heavens that do not cooperate with the EU;
Amendment 35 #
Draft opinion Paragraph 3 a (new) 3a. Points out that names in the Pandora Papers include political leaders in developing countries that heavily depend on aid from the European Union;
Amendment 36 #
Draft opinion Paragraph 3 b (new) 3b. Recalls the reputational risk for countries which facilitate taxation structures that are not deemed to be sufficiently transparent; Recalls also the security risks that may arise from the misuse of financial structures that are not deemed to be sufficiently transparent;
Amendment 37 #
Draft opinion Paragraph 3 c (new) 3c. Stresses the need for effective sanctions mechanisms as regards the EU list of non-cooperative jurisdictions for tax purposes;
Amendment 38 #
Draft opinion Paragraph 4 4.
Amendment 39 #
Draft opinion Paragraph 4 4. Emphasises the structural implications of the tax avoidance practices of both multinationals and individuals for developing countries’ fiscal capacities and mid to long-term growth prospects and social development; highlights the increase in inequality, insecurity and poverty caused by the lack of fiscal space as a result of tax avoidance, which deprives governments in developing countries of the revenues they need to sustain investment in basic services and the economic infrastructure upon which broad-based economic growth depends;
Amendment 4 #
Draft opinion Recital D (new) D. whereas automatic exchange of information is an effective tool to tackle tax evasion and other IFFs;
Amendment 40 #
Draft opinion Paragraph 4 4. Emphasises the structural implications of the tax avoidance practices of both multinationals and individuals for developing countries’ fiscal capacities and mid to long-term growth prospects; highlights the increase in inequality and poverty caused by the lack of fiscal space as a result of tax avoidance; recalls that the fight against cross-border tax evasion is crucial as a means to expand the tax base; increase tax revenue and to protect the integrity and fairness of tax systems;
Amendment 41 #
Draft opinion Paragraph 4 4. Emphasises the structural implications of the tax avoidance practices of both multinationals and individuals for developing countries’ fiscal capacities and mid to long-term growth prospects; highlights the increase in inequality and poverty caused by
Amendment 42 #
Draft opinion Paragraph 4 a (new) 4a. Reminds that the European Parliament has repeatedly stressed the need for a review of the EU listing process of non-cooperative jurisdictions for tax purposes to improve its transparency, the criteria used, and the effectiveness of associated defence measures;
Amendment 43 #
Draft opinion Paragraph 4 b (new) 4b. Reiterates its call to reform the Code of Conduct for business taxation to combat harmful tax practices, which has become seriously outdated in the context of growing digitisation and globalisation, and asks to replace it with a framework on aggressive tax arrangements and low- rates, which would include sharper criteria for defining what constitutes a tax heaven, as well as inclusion of highly mobile wealthy individuals under the scope of the instrument;
Amendment 44 #
Draft opinion Paragraph 5 5. Re
Amendment 45 #
Draft opinion Paragraph 5 5.
Amendment 46 #
Draft opinion Paragraph 5 5.
Amendment 47 #
Draft opinion Paragraph 5 5. Recalls that the upcoming global corporate minimum tax will define a fixed baseline for corporate taxation, thereby combating corporate tax avoidance, and calls for the resulting fiscal capacities to be used to build resilient, sustainable and equal societies; calls for international cooperation on the corporate minimum tax to be utilised in such a way as to introduce better transparency measures for the prosecution of tax avoiders; recalls that the distribution of taxing rights between countries must be fair, equitable and in line with the goal of reducing inequalities among countries;
Amendment 48 #
Draft opinion Paragraph 5 5. Recalls that the upcoming global corporate minimum tax will define a fixed baseline for corporate taxation, thereby combating corporate tax avoidance, and calls for the resulting fiscal capacities to be used to build resilient, sustainable and equal societies; calls for international cooperation on the corporate minimum tax to be utilised in such a way as to introduce better transparency measures for the prosecution of tax avoiders and increase transparency and cooperation between governments;
Amendment 49 #
Draft opinion Paragraph 5 a (new) 5a. Underlines that while some aspects of illicit financial flows are addressed through UN conventions, including the UN Convention Against Corruption and the UN Convention Against Transnational Organized Crime, there is no such convention for tax-related illicit financial flows, including tax evasion and avoidance; calls on the EU to support the proposal on a UN Convention on Tax that enables the discussion on creating a global tax body, and where all countries, including developing countries, can participate on an equal footing, thus strengthening the fight against illicit financial flows, promoting fairness towards developing countries and linking global tax governance to the SDGs; calls to promote fairness towards developing countries by replacing existing tax standards and rules that are biased in favour of richer and larger countries and fully take into account the interests, concerns and needs of developing countries;
Amendment 5 #
Draft opinion Recital E (new) E. whereas in October 2021, the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting (IF) agreed a two-pillar solution to address the tax challenges arising from the digitalisation of the economy; but whereas some developing countries expressed concerns, or even refused to endorse this global corporate tax deal (as in the case Kenya and Nigeria);
Amendment 50 #
Draft opinion Paragraph 5 a (new) 5a. Stresses that tax transparency and exchange of information are essential to stem illicit financial flows and increase domestic resource mobilisation, which is of particular importance to fulfil Sustainable Development Goals, including the African Union Agenda 2063, especially in the current context, marked by rising debt, the impact of the Covid-19 pandemic and the consequences of the war in Ukraine on African economies;
Amendment 51 #
Draft opinion Paragraph 5 a (new) 5a. Emphasises that a step-change in the taxation of private and corporate profits as well as private wealth is essential to increase fiscal spaces to fund sustainable investments and gather the much needed development funding, which is now more urgently needed than ever before due to the relentless worsening of the impacts of climate change and the continuing impacts of the COVID pandemic, especially in the Global South;
Amendment 52 #
Draft opinion Paragraph 5 b (new) 5b. Calls to increase government accountability and public participation that includes all relevant stakeholders in the international decision-making process on taxation;
Amendment 53 #
Draft opinion Paragraph 6 6. Calls for
Amendment 54 #
Draft opinion Paragraph 6 6.
Amendment 55 #
Draft opinion Paragraph 6 6. Calls for full international transparency on the real owners of letterbox companies and real estate; calls to ensure a high standard of transparency, while incorporating the interests, concerns and needs of developing countries; considers that the international exchange of
Amendment 56 #
Draft opinion Paragraph 6 a (new) 6a. Recalls the two-pillar solution of October 2021, agreed by the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting (BEPS 2.0) to address the tax challenges arising from the digitalisation of the economy, and the critics expressed by developing countries, including the African Tax Administration Forum, for side-lining their interests and for not sufficiently addressing the specific loopholes that limit the taxation rights of African countries;
Amendment 57 #
Draft opinion Paragraph 6 a (new) 6a. Stresses that the Pandora Papers provide an insight into the scope of sanctions against a number of Russian elites in response to Russia’s invasion of Ukraine; condemns the circumvention of these sanctions by Russia's elites, as revealed in the Pandora Papers, and calls for effective action to be taken to counter this phenomenon;
Amendment 58 #
Draft opinion Paragraph 6 a (new) 6a. Calls on the EU to support developing countries in combatting illicit financial flows, EU companies and multinationals tax evasion, to ensure taxes are paid where profits and real economic value is created, in order to stop base erosion and to abolish profit- shifting;
Amendment 59 #
Draft opinion Paragraph 6 b (new) Amendment 6 #
Draft opinion Recital F (new) F. whereas according to the report “Tax Transparency in Africa 2022. Africa Initiative Progress report”[1], illicit financial flows are estimated to be in the range of USD 50-80 billion (EUR 48-77 billion) annually for the continent; [1] The report is a joint publication by the African Union Commission, the African Tax Administration Forum and the Global Forum on Transparency and Exchange of information for Tax Purposes (Global Forum).
Amendment 60 #
Draft opinion Paragraph 6 b (new) 6b. Stresses that international cooperation is vital for achieving fair and effective domestic tax systems;
Amendment 61 #
Draft opinion Paragraph 6 c (new) 6c. Calls on the EU to support the setting-up of a UN Framework Convention on Tax, with the aim to strengthening international cooperation and governance on tax and trade-related illicit financial flows; highlights the need to introducing transparent and inclusive decision-making where all countries can negotiate as equals;
Amendment 62 #
Draft opinion Paragraph 6 c (new) 6c. Calls on the Commission and the Member States to support the proposal of a UN convention on tax;
Amendment 63 #
Draft opinion Paragraph 6 d (new) 6d. Recalls that the EU and its Member States have recognised that fair, progressive and effective tax systems are vital for the achievement of other UN goals and commitments; stresses that the proposal for a UN Convention on Tax aims to build on these agreements, to increase economic justice at the global level, and respond to the urgent need for new and additional public resources to combat the major global challenges of our time;
Amendment 64 #
Draft opinion Paragraph 6 e (new) 6e. Recalls that most developing countries struggle to fully realise the expected revenues from the mining sector due to a range of challenges, both external, such as aggressive tax planning by multinationals, and internal, including weak enforcement of tax laws and overly generous tax incentives to transnational companies; stresses the need to achieve a fair balance between national and investor interests in the design of mining fiscal regime; deems that the fiscal conditions and regulations under which extractive industries operate shall be revised;
Amendment 65 #
Draft opinion Paragraph 6 f (new) 6f. Urges the EU to ensuring a fair distribution of taxing rights while negotiating tax and investment treaties with developing countries; and calls on the EU to increase its technical assistance and funding to strengthen their tax administration;
Amendment 66 #
Draft opinion Paragraph 6 g (new) 6g. Acknowledges that the extractive sector is particularly prone to illicit outflows in Africa; believes that the review of tax treaties should aim to strengthening the bargaining position of host governments to obtain better returns from their natural resources base and stimulate diversification of their economy; in addition, takes the view that the Extractive Industries Transparency Initiative (EITI) should be made mandatory and extended: they should not focus only on governments but also on producing firms and commodity trading companies;
Amendment 67 #
Draft opinion Paragraph 6 h (new) 6h. Stresses that multinational companies should report tax information in each country where they operate; encourages developing countries to enact mandatory country-by-country and project-by-project reporting requirements, notably in the mining sector;
Amendment 68 #
Draft opinion Paragraph 6 i (new) 6i. Calls on governments of developing countries to intensify the fight against corruption and money laundering, as a means to contribute to tackling illicit financial flows;
Amendment 69 #
Draft opinion Paragraph 6 j (new) 6j. Encourages developing countries to develop regional integration arrangements on tax incentives to prevent harmful competition in the effort to attract foreign direct investment;
Amendment 7 #
Draft opinion Recital G (new) G. whereas in 2019, the Africa Group at the United Nations called for a UN Convention on Tax, as an important tool to tackle illicit financial flows; and whereas in February 2021, the High Level Panel on International Financial Accountability, Transparency and Integrity for Achieving the 2030 Agenda (the FACTI Panel) also included the proposal for a UN Tax Convention as a key recommendation in its final report;
Amendment 8 #
Draft opinion Recital H (new) H. whereas the potential offered by the taxation of extractive industries to boost fiscal revenues is by and large not well exploited in developing countries due to the inadequacy of tax rules or to difficulties in enforcing them, since transnational companies frequently resort to tax avoidance techniques; whereas this challenge is all the more acute for low- income countries that are heavily dependent on natural resources for their initial development drive;
Amendment 9 #
Draft opinion Paragraph -1 (new) -1. Highlights that the revelations known as the Pandora Papers, released by the International Consortium for Investigative Journalists (ICIJ), show apparent tax evasion and money laundering on a vast scale, in particular through letterbox companies and trusts;
source: 737.319
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