Now is time to ensure that taxes are paid where profits are made, say S&Ds

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Today, S&D Euro MPs in the economic and monetary affairs committee backed new rules for corporate taxation in Europe to ensure that companies pay their taxes where profits are made.
 
Both proposals approved by the Parliament for a common tax base and a common consolidated tax base are setting new standards for corporate taxation to resolve the issue of tax shifting, worth €200 billion in tax losses for the EU member states.
 
Paul Tang, S&D Euro MP who drafted the report on the common corporate tax base, said:
 
“The proposals for a common tax base are immeasurably needed. Tech giants especially, like Facebook and Amazon, will feel the consequences of these proposed measures. It is high time because they have no physical presence and digital billion-euro companies can operate under the radar in countries where they actually do generate profit.
 
“The non-taxation of Google and Facebook alone inflicts a €5 billion tax loss on European treasuries. The proposal by the European Parliament ensures that these companies will pay their fair share of taxes from now on.
“Right now, corporate taxation is levied nationally and companies are abusing the differences in national taxation systems. Thanks to globalisation and digitisation, big companies can meticulously plan the most profitable tax strategy. This proposal will put an end to these practices.
 
“The common consolidated corporate tax base ensures that companies pay taxes there where their activity takes place. Differences in the base, now fully utilised by dextrous tax planners, will belong to the past.
 
S&D Group negotiator on the common consolidated tax base, Belgian socialist Hugues Bayet MEP, added:
 
“Today’s vote is a step forward in our fight against tax avoidance and aggressive tax planning. It is crucial to establish a common corporate tax system that is fair in Europe. Member states should not engage in a negative tax race to the bottom. Nor should big multinationals be able to do their tax shopping across Europe.
 
“This kind of competition favours intra-European offshoring and essentially encourages multinationals to look for places with lower tax rates to the detriment of employment. We want Europe to stand behind its citizens and not behind multinationals!”
 
In March, the European Parliament will vote on the proposal in Strasbourg. In the meantime, the member states still have to find an agreement on the proposal.