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The European Parliament demands an end to unfair tax competition

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PEDRO DEL ROSAL26/01/2016 - 6:00

The European Parliament (EP) claims that the Member States have granted illegal fiscal aid, can not benefit from amounts recovered following a breach of the regulation on State tax aid, and calls for that amount to be transferred to the Member States they have suffered erosion of their tax bases or the budget of the European Union (EU). This is one of the demands that the European Parliament included in its annual report on competition policy, which was approved last week.

 A document showing the concern of the body because, he says, "the current tax practices of some Member States seriously endanger the single European market", especially with regard to the taxation of multinational companies. The report, adopted with 500 votes in favor, 137 against and 73 abstentions, is highly critical of the actions of Brussels in this area. Thus, "it regrets that, in the last mandate, the Commission has started only very limited investigations into possible cases of state tax incentives, despite well-founded suspicions that have come to light number".
As concrete measures , the document proposes the introduction of a common consolidated base of corporate tax , the VAT revisision and imposing multinational to communicate their sales and profits country by country.

Aggressive tax planning developed by some big companies is also a matter of concern for the EP. In this regard, notes that " promote harmful tax practices through the creation of a private sole proprietorship limited liability ( SUP ) at European level , whose rules provide for the possibility of having two different addresses , it is a wrong approach ."

It also recommends the adoption of a definition of "permanent establishment" to get companies to not artificially avoid fiscal presence in the States in developing an economic activity.

Finally , this section also claims that a " comprehensive, transparent and effective tax information " exchange is guaranteed, and that the EC adopt a " very precise " in relation to state aid in taxation and transfer pricing guidelines.