In the wake of a series of G7 and G20 meetings that could lay the foundations for a minimum rate in corporate taxation at the international level, on 1 June Parliament and the Council found a difficult agreement on the publication – country by country – of the taxes paid. by multinational companies. At the same time, also yesterday the European Union inaugurated the figure of the European prosecutor, called to fight against fraud against the collection of value added tax (VAT).
Aim for more transparency
The agreement between Parliament and the Council, which must be approved by both institutions, provides that companies with a turnover exceeding 750 million euros must publish the amount of taxes paid annually country by country. The goal is to enforce transparency and prevent companies from shifting profits to find the most convenient jurisdiction. According to a 2020 article by Serena Fatica and Wildmer Gregori, published by the journal Economic Modeling, on average 21% of European banks’ profits are shifted from one country to another.
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The proposal for a directive was presented by the Juncker Commission. Officially it is not a tax matter because in order to avoid being forced into a very difficult unanimity of the countries, necessary in terms of taxation, Brussels had proposed a different legal basis, linked to the internal market. The text will therefore have to be approved as a last resort by a qualified majority of the twenty-seven. After having opposed the measure for a long time, Austria changed its position, unlocking a painful agreement.
An increase in revenue is expected
«With this agreement – commented the Austrian Socialist MEP Evelyn Regner – we demonstrate the pioneering role of the Union in fiscal and corporate transparency. It’s only the beginning”. During the negotiations, the same parliamentarian accused some governments opposed to the project of behaving “as lobbyists for large companies”. At a time of high debt, the attempt is twofold: to impose the payment of taxes and increase tax revenues in a context in which multinationals are too often able to evade taxation.
First steps of the new European Public Prosecutor’s Office
In the meantime, the new European Public Prosecutor’s Office was inaugurated yesterday in Luxembourg. The chief prosecutor, the Romanian jurist Laura Kövesi, hailed “a historic moment” for the European Union. He recalled that the new institution saw the light “after two decades of discussions”. Among other things, the new body will monitor the way in which the money of the new 750 billion euro Fund for the Recovery will be used and will fight against VAT evasion.