8 June 2016
A large majority of MEPs have voted in favour of a report on the ‘anti base erosion and profit shifting’ (BEPS), which should have focused on artificial fiscal constructions that lack any commercial justification.
A large majority of MEPs have voted in favour of a report on the ‘anti base erosion and profit shifting’ (BEPS), which should have focused on artificial fiscal constructions that lack any commercial justification. Instead, the recommendations will result in higher tax burden for bona fide businesses;hurting competitiveness, discouraging investment and hindering job creation.
‘The fight against tax evasion and aggressive tax planning is a political priority for the ECR. We therefore support the objectives of this directive. However, while the original commission proposal was not perfect, by going beyond the OECD framework without any impact assessment this report makes things worse,’ says Sander Loones, Flemish MEP and Vice-President of the European Parliament’s economics committee.
Therefore, the European Conservatives and Reformists MEPs decided not to support the report as it calls for (double) taxation of foreign income that has been taxed under a taxation rate of 15%. ‘We believe the goal should be to tax profits where economic activity takes place, not to introduce the concept of Minimum Effective Taxation (MET).’
The report also wants to limit corporate deductions for interest payments to 20% or €2 million, whichever is higher, and further limits the period during which deductions can be made to five years. ‘This risks hurting companies that apply for a loan for legitimate commercial use in order to make investments. These investments accelerate the economic recovery, increase productivity and promote employment. But this report doesn’t encourage businesses to invest in Europe.’
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