On December 16, 2015 the European Parliament passed a Resolution with recommendations to the European Commission on bringing transparency, coordination and convergence to corporate tax policies in the Union. The Resolution that was drafted by the Economic and Monetary Affairs Committee was passed by 500 votes to 122, with 81 abstentions. The fact that the Resolution was passed means that the European Commission will have three months to respond to the recommendations, either with a legislative proposal or with an explanation for not doing so.

By passing the Resolution the European Parliament asks the European Commission, inter alia, to:

·        table a proposal for country-by-country reporting on profit, tax and subsidies by June 2016;

·        table a proposal for introducing a "Fair Tax Payer" label;

·        introduce a Common Tax Base (CCTB) as a first step, which later on should be consolidated as well (CCCTB);

·        table a proposal for a common European Tax Identification Number;

·        table a proposal for legal protection of whistle-blowers;

·        improve cross-border taxation dispute resolution mechanisms;

·        table a proposal for a new mechanism whereby member states should inform each other if they intend to introduce a new allowance, relief, exception, incentive, etc. that may affect the tax base of others;

·        estimate the corporate tax gap (corporate taxes owed minus what has been paid);

·        strengthen the mandate and improve transparency of the Council Code of Conduct Working Group on Business Taxation;

·        provide guidelines regarding “patent boxes” so as to ensure they are not harmful;

·        come up with common definitions for "permanent establishment" and "economic substance" so as to ensure that profits are taxed where value is generated;

·        come up with an EU definition of "tax haven" and counter-measures for those who use them; and

·        improve the transfer pricing framework in the EU.

Click here to be forwarded to the text of the Resolution with recommendations to the European Commission on bringing transparency, coordination and convergence to corporate tax policies in the Union as passed by the European Parliament on December 16, 2015 and Annex thereto, as available on the website of the European Parliament, which will open in a new window.

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