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A maximum in profits and a minimum in taxes: Many multinationals like Apple, Google, Starbucks, McDonalds or BASF use complex tax haven constructions to shirk systematically paying taxes on their record profits. According to the OECD, the amount lost to society is as much as $ 240 billion per annum.
Money, which is urgently needed for
- health and social policy
- the expansion of the rail network as well as road maintenance
- stimulus and labour market packages
- environmental programmes and much more.
Even though, multinational corporations benefit from public infrastructure, they are obviously very reluctant to contribute to its funding.
EU proposals on corporation taxation go not far enough
The European Commission wants to bring more tax justice in corporate taxation with new legislative proposals. However, they are by no means far enough to ensure more justice and fairness. Furthermore, some policymakers from different EU Member States seem not to be interested to putting an end to tax havens.
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Please help us to put pressure on the Prime and Finance Ministers of the EU Member States. Let us urge the Ministers to use the negotiations on corporate taxation to speak up for tax justice and against tax havens.
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Email to the Prime and Finance Ministers of the 28 EU Member States
Numerous cases in recent years have shown that many international corporations are using complex tax structures to systematically channel enormous profits past the taxman. As a result, many billion euros in lost tax revenue are missing, where they are urgently needed, for example with regard to
- job creation,
- boosting the economy,
- public infrastructure projects,
- environmental issues,
- as well as health and pensioner care.
I would therefore urge you to consider the following key points during the negotiations on the proposal for a directive on the introduction of a “Common Consolidated Corporate Tax Base”:
- The proposed two-step approach for the introduction of the CCCTB will inevitably lead to new loopholes. Therefore the legislative text on the consolidation has to be negotiated and passed together with the proposal on the common tax base. There should be a rapid implementation for the common tax base and the consolidation by December 2019. Only then will it be possible to realise the advantages of the “Common Consolidated Corporate Tax Base”.
- The targeted global revenues threshold of 750 million €, from which the new regulation shall apply, is too high. The threshold should be set at a maximum of 40 million € in accordance with the accounting directives.
- Effective Controlled Foreign Corporation (CFC) rules are indispensable. They should be on a full-inclusion basis, treating all foreign affiliates of EU-resident parent companies as CFCs so that the group consolidated profits are subject to tax in the resident country.
- The competition for the lowest corporate tax rate, which we have witnessed over many years in the European Union, has to end at last. Please support an EU-wide minimum corporate tax rate.
Apart from the proposal on the introduction of a Common Consolidated Corporate Tax Base, the speedy adoption of the Directive on Country-by-Country (CbC) Reporting is also necessary. Only if transparent and detailed country-specific information on the actual profit tax payments by multinational corporations is available, it will be possible to prevent aggressive tax planning and shifting profits to tax havens. The threshold for the CbC directive should be set at a maximum of 40 million € in accordance with the accounting directives.
Please keep me updated on the progress of the negotiations and your activities regarding corporate taxation. I not only regard measures against tax havens and for tax justice as an important issue, but they also play an important role in my decision, which political party will get my vote at the next election.