Momentous day for Fair Tax in Europe
Today, the European Parliament supported, by an overwhelming majority, a series of legal recommendations that will seek to tackle corporate tax avoidance. The measures were detailed in a Tax Report from the Economic and Monetary Affairs Committee, and include proposals for a ‘Fair Tax Payer Label’ across Europe. Both the size of the majority (500 for, and just 122 against) and the diverse political composition of support (which included members from the green, socialist, liberal, labour and conservative blocks) ensures that the European Commission will need to consider these matters more seriously than ever before, in the three months they now have to respond.
The ‘Fair Tax Payer Label’ is inspired by the UK’s Fair Tax Mark, and follows engagements with the Special Committee on Tax Rulings in the summer of 2015. The recommendation sets out that a voluntary Label should be developed by Europe, but awarded by national bodies. Moreover, it should only be available to those businesses that have “gone above and beyond the letter of what is required of them under Union and national law.”
In the run up to the vote, the Fair Tax Mark and a number of its accredited businesses wrote an open letter to MEPs urging them to respond positively to the tabled proposals. They pointed out that: “It is important that progressive business practice is recognised and other companies are challenged to be as transparent as possible. Enhanced transparency is vital, whether from country-by-country reporting or from public statements on tax policies and governance. Business must increasingly demonstrate that they are open and transparent about their tax affairs and pay the right amount of corporation tax at the right time and in the right place.”
Paul Monaghan, of the Fair Tax Mark, commented: “It is incredible to see how much progress the Fair Tax Mark has made in less than two years. ‘Tax avoidance’ is very much the corporate responsibility issue of the day. How a business responds to this issue now defines how it is viewed by a significant proportion of the public. We extend our warmest regards to all those European parliamentarians who have had the sense and courage to take action, not least the co-rapporteurs of the Tax Report, Anneliese Dodds and Ludek Niedermayer. We will continue to seek to work with the European Parliament and Commission to take matters forward in a constructive manner, whilst at the same time remaining vigilant for the inevitable attempts that will be made by tax luddites and avoidance-apologists to derail progress.”
Further details on the legislative resolution can be found at Parliament News.