Thursday, July 9, 2015
Ahead of the UN conference in Addis Ababa on financing for development on July 13-16, Members of the European Parliament (MEPs) voiced support for a number of initiatives to discourage the use of aggressive international tax avoidance strategies, to support developing countries.
MEPs voted on a non-binding resolution on July 8, 2015, that the European Union and its member states should make multinationals report on their financial performance, tax affairs, assets, and employee numbers on a country-by-country basis "to help fight tax evasion and illicit money flows in developing countries." They also called on EU financial institutions to ensure that companies receiving EU support do not "participate" in tax evasion or contrived avoidance.
Rapporteur Elly Schlein (S&D, IT) said: "We now call on the Commission to put forward an ambitious action plan to support developing countries in fighting tax evasion and tax avoidance and in setting up fair, well-balanced, efficient, and transparent tax systems, also with a view to the upcoming Conference on Financing for Development."
MEPs said the EU and member states should push for the global adoption of country-by-country reporting as standard. They said the framework should cover listed and unlisted companies in all countries and sectors and especially those companies extracting natural resources. They added that member states should ensure that the administrative burdens involved are proportionate and that micro-enterprises remain excluded.
The MEPs also stated that there should be increased transparency on the beneficial ownership of companies, trusts, and similar institutions. This information should be made publicly available, they agreed, to prevent anonymous shell companies and comparable legal entities from being used to launder money or to finance illegal activities or terrorist activities.