#Tax avoidance: European Parliament adopts ambitious legislation

The European Parliament has today (8 June) adopted a legislative report on the Anti-Tax Avoidance Directive, proposed by the European Commission in January 2016, aimed at tightening rules against tax avoidance practices that directly affect the functioning of the internal market. 

This proposed legislation responds to the finalisation of the project against Base Erosion and Profit Shifting (BEPS) by the G20 and the OECD and targets taxpayers who act against the actual purpose of the law, taking advantage of disparities between national tax systems, to reduce their tax bill. The OECD study has estimated that aggressive tax optimization by multinationals cause's losses to state budgets all over the world amounting to between USD$100-$240 billion every year.

This represents between 4 and 10% of global corporate tax revenues. ALDE shadow rapporteur Enrique Calvet Chambon MEP played a key role in delivering a compromise agreement on this report, which he hopes will now put pressure on EU member states to adopt an ambitious approach.

Calvet Chambon said: "European citizens have had enough of unethical tax practices. With the approval of this report, the European Parliament sends the Council and the Commission a strong message: addressing the existing legal and technical loopholes which allow tax evasion is a matter of absolute urgency.

"Fair and effective corporate taxation must become the cornerstone of the single market; this has nothing to do with demagogy or going against companies or business activities for the sake of it. The goal is to fight against fraud from a competitive and productive approach and to protect medium and small businesses from being damaged by these practices. This is the only possible approach if we are to deliver competitiveness and a fairer tax system."

The proposed Directive is part of the Commission's Anti- Tax Avoidance Package. It builds on the Action Plan for Fair and Efficient Corporate Taxation, presented by the Commission on 17 June 2015 and it responds to the finalization of the project against Base Erosion and Profit Shifting (BEPS) by the G20 and the OECD.

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