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Parliament backs new laws to crack down on letterbox companies


Public Affairs
The European Parliament today backed new rules governing how companies can move between EU member states. The right wing ECR Group had attempted to block the proposals that will help crack down on companies artificially moving their headquarters to other member states to avoid taxes or social legislation. 
S&D MEP and author of the report Evelyn Regner said:
“We are pleased that the Parliament has overwhelmingly backed our position, butare disappointed by the attempt of right-wing groups to block these proposals.These new rules will create a clear procedure to follow for genuine businesses to set up offices in other member states, while cracking down on companies doing it for artificial reasons such as evading tax, social contributionsor avoiding national labour laws. We have been pressuring the European Commission to crack down on this type of abusive behaviour for years and finally they presented draft proposals to do this earlier this year.
“The European Parliament has greatly strengthened the proposals to ensure that workers are fully informed and consulted throughout the process whenever a company wants to move offices to another member state. If a company is attempting to merge or relocate then workers must be fully involved and have their participation rights protected. 
“Company mobility should be about genuine economic activity, not just searching for the laxest labour protections or lowest tax rates. We can’t allow a race to the bottom, with member states competing to offer the lowest standards possible. Authorities need to be able to check, if a company is relocating for genuine reasons or simply creating an artificial arrangement to avoid theirobligations and responsibilities. If they are engaged in an artificial arrangement then the company should not receive the necessary certificate it needs to finalise the cross-border operation.
“These proposals are important to help rebuild citizens’ trust in the Single Market. Now, we ,must convince the Council to protect workers' rights on the highest possible level and find a solutionto show that it brings genuine economic benefit and crackdown on companies abusing it to avoid their taxes and their responsibilities.”


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