EU member states are free to decide their own corporate tax rate, and many businesses - big and small - make the most of it. EuroparlTV investigates.

Reporter: Fiscal optimisation or fiscal dumping?

https://api.multimedia.europarl.europa.eu/documents/20125/16222831/m003-0239-en.srt

With Europe still not out of crisis mode,

few things will outrage the average citizen  suffering from austerity more

than rich or multinational companies  using their resources to avoid paying tax.

A rising subject is the strategy  of the so-called GAFA:

From their point of view,  they are practising fiscal optimisation

by selling products taxed in the countries  offering the lowest tax rates in Europe.

From my point of view  that's fiscal dumping.

But what should Europe do to make  everybody pay their fair share?

EuroparlTV went to Romania  and to France to find out.

Christophe Benzimra  is a French entrepreneur,

He handed the family business to his sister  and left France,

frustrated by the demands put on business  by a Western European welfare state.

Once you've paid your taxes,  at the end of the year,

you may have taken risks,  worked 12 hours a day

and suffered from stomach ulcers,  but it will be in vain.

What I criticised France for at the time

was that there was  a very heavy tax burden.

After a successful career  as a professional poker player,

Christophe Benzimra finally settled  in Romania and started a new business

He says he couldn't possibly succeed  under Western European conditions.

In France  it's more and more complicated.

And it's impossible to work industrially  as we do here.

So it's good that there are some countries  in Europe practising fiscal dumping

in order to calm down certain countries  which would like to go too far.

Member States of the European Union  are free to tax companies as they see fit.

Romania's corporate tax rate  is less than half that of France.

While some entrepreneurs,  as we heard, welcome this,

to others it represents unfair competition.  We've travelled back to France

to visit one of the most successful  internet-based enterprises in the country,

Changing the system  requires EU harmonisation.

We can't fight against tax exemption  which is almost a form of organised crime,

We can't fight it  unless countries act in coordination.

What grates even more is the way  multinational companies,

particularly direct competitors  on the internet,

have used loopholes and inconsistencies  within the EU tax regime.

But recent political events  have made him hopeful of change.

The French and UK governments have  realised that the big American groups,

which are sometimes called GAFA -  Google, Amazon, Facebook and Apple -

in relation to the turnover in each of the  large EU countries are ridiculously low.

with a retrospective tax demand  of 252 million euros.

And in the UK the Public Accounts  Committee of the House of Commons

invited representatives of multinational  companies for a thorough grilling.

Some of the answers from the witnesses  left them almost speechless.

Our revenue across Europe for 2011 for  Amazon EU Sarl was 9.1 billion euros.

Our profit after tax was 20 million euros.  And the tax expense...

You say the profit after tax was 20?  -That's pathetic.

Of the 9.1 billion  of European sales in 2011,

what were your sales in the UK in 2011?  -I will come back to the committee

and, if it's possible to disclose that figure,  disclose that.

but we need proper answers  to perfectly proper questions

trying to establish the economic activity  in this country

and therefore what would be a reasonable  corporation tax due. That's our job.

Amazon is disputing France's tax claims  in the courts.

Other accused US multinationals,  like Starbucks,

have agreed to voluntarily pay more  into some national tax coffers.

Meanwhile, back in Romania,  Christophe Benzimra can be pretty safe

in the knowledge that,  due to corporate tax avoidance,

his way of profiting  from the EU tax patchwork

is unlikely to be among the top priorities  when it comes to new harmonisation.