European Parliament votes in favour of an EU fair tax label

  The European Parliament has voted in favour of a “Fair Tax Payer” label across the EU to tackle tax avoidance. The proposal was passed on 16 December by  500 votes to 122,...

 

The European Parliament has voted in favour of a “Fair Tax Payer” label across the EU to tackle tax avoidance.

The proposal was passed on 16 December by  500 votes to 122, and drew cross-party support from members of the green, socialist, liberal, labour and conservative blocks.

The plan came from Europe’s Economic and Monetary Affairs Committee, where it was tabled in a report by MEPs Annelise Dodds (Socialists and Democrats, UK) and Ludëk Niedermayer (European People’s Party, Czech Republic).

MEPs had been lobbied ahead of the parliamentary vote by the Fair Tax Mark, which was set up in the UK and pioneered by co-operatives – it has been awarded to the Midcounties Co-operative, the Phone Co-op, the East of England Co-operative, Radstock Co-operative, Co-operatives UK and the Co-operative Group.

“It is important that progressive business practice is recognised and other companies are challenged to be as transparent as possible,” a letter from Fair Tax Mark urged. “Enhanced transparency is vital, whether from country-by-country reporting or from public statements on tax policies and governance.”

Paul Monaghan from The Fair Tax Mark called the vote a “milestone”.

“Everyone at the Fair Tax Mark has been really pleased at the progress to date – we have certified 16 businesses since our launch in February 2014,” he said. “But this development proves the Mark is achieving amazing cut-through.”

“We will continue to seek to work with the European Parliament and Commission to take matters forward in a constructive manner, while remaining vigilant for the inevitable attempts that will be made by tax luddites and avoidance apologists to derail progress,” he added.

The Fair Tax Mark, set up in the UK and pioneered by co-ops
The Fair Tax Mark, set up in the UK and pioneered by co-ops

The European Commission now has three months to respond to the recommendations in Dodds and Niedermayer’s report, either with a legislative proposal or an explanation.

The report is also asking the EC to table a proposal for country-by-country reporting on profit, tax and subsidies by June 2016.

And it wants a proposal for a common European Tax Identification Number and legal protection of whistle-blowers.

Member states should also inform each other if they intend to introduce a new allowance, relief, exemption or incentive that may affect the tax base of others, adds the report.

The report was commissioned in the wake of the the Luxembourg Leaks scandal, which revealed details about tax avoidance schemes in Luxembourg.

It calls for common tax rules across the EU, which include shared definitions for “permanent establishment” and “economic substance” to ensure profits are taxed where the value is generated. It also calls for an EU definition of “tax heaven” and counter measures for those who use them.

But the UK is expected to reject potential EU measures to tackle large-scale tax avoidance by multi-nationals, according to statement made by the Treasury minister responsible for tax policy in June.

The Fair Tax Mark has been developed by a team of tax justice campaigners and tax experts in the UK to ensure that companies pay the right amount of tax in the right place at the right time.


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