European Parliament backs new standard for corporate taxation - Main contents

Tech giants like Google and Facebook need to pay their fair share, according to the European Parliament. The committee for Economic and Monetary Affairs backed a proposal for a European corporate tax base.

Social democrat Paul Tang (MEP): “Especially tech giants like Facebook and Amazon will feel the consequences of this proposal. That is about time: because they have no physical presence, they can hide from the tax collector. For Google and Facebook alone, this amounts to a 5 billion euro tax loss for European treasuries. The proposal by the European Parliament ensures that these companies will pay their fair share of taxes from now on.”

The common consolidated corporate tax base, ensures that companies pay taxes there where their activity takes place. No longer will the corporates decide where they book profits and pay taxes, but rather the member states.

“This report sets a new standard for corporate taxation, which is hugely needed. Right now, corporate taxation is levied nationally. Thanks to globalisation and digitisation, big companies can meticulously plan the most profitable tax strategy, taking full advantage of differences among national taxation systems. This proposal will put an end to these practices.” says Paul Tang.

“The agreement comes at an important point in time. France and Germany work on a European corporate tax and the Commission want a digital tax. National and European leaders seem to grasp how the current system is outdated and leaves citizens and small companies worse off. International action is needed to turn the tide, and this will certainly not come from the US of Donald Trump. The EU is our best chance to make our tax system more just and more modern.”

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.

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