Lamassoure on tax rulings committee: "We have an obligation to produce results" | WPN World People News

Are multinational companies paying their fair share of taxes? While the European Commission launched a series of inquiries in all EU member states, the Parliament has set up its own special committee to investigate into tax rulings involving large international companies. We talked to committee chair Alain Lamassoure, a French member of the EPP group, to find out his views and expectations.

Alain Lamassoure

How would you explain to an ordinary citizen the difference between a tax ruling, tax evasion and tax fraud?

A tax ruling refers to a taxation situation involving one specific company or one specific person. It’s a completely legal procedure and offers every tax payer legal certainty and transparency.

Tax fraud involves deliberately circumventing the rules to avoid paying taxes. Unlike fraud, optimisation is legal, but could be seen as illegal from a legal point of view when it involves abusing a right (using legal mechanisms to avoid taxes) but in practice proving this remains difficult for tax authorities. Finally, tax evasion can include both optimisation and fraud. It’s difficult for tax services to prove this and requires painstaking work.

Many people believe multinational companies are getting away with not paying taxes, while they are increasingly having to tighten their belt due to public finances being cut. How should this perception be tackled?

Fiscal competition can be healthy when it contributes to sustaining a dynamic economy, especially by making companies more competitive, which in the end will lead to every European citizen enjoying better goods for a lower price.

However, this competition is harmful when it sparks a fiscal war between the different EU member states and leads to the fragmentation of the single market and the disintegration of the Union. This would be unacceptable.

It is up to the Parliament to bring forward proposals in favour of transparency and fairness.

We will soon work on concrete proposals regarding this.

What can we realistically expect from the parliamentary committee considering that all changes to taxation rules will have to be approved unanimously by all 28 member states?

The committee only has a short mandate and an obligation to produce results. Within six months it will have to come up with proposals for tackling practices that erode the tax basis , strengthen administrative cooperation between tax services and work on more ambitious agreements on increasing transparency with parts of the world where opacity and complacency still reign.

Source: European Parliament