Is the work of Parliament's special tax rulings committee a mere drop in an ocean in an effort to end harmful tax practices? We hear of the progress but also of continuing obstacles.

Tax rulings: Killing the toxic practices in Europe

https://api.multimedia.europarl.europa.eu/documents/20125/12120770/m006-0019-en.srt

Parliament's Special Committee  on Tax Rulings is winding up

with a full vote on its findings  and recommendations

Set up after LuxLeaks and the outrage  at the tax breaks given to multinationals,

the Committee was tasked with looking  into whether tax rulings clash

with state aid rules  and national taxation law.

is to keep the pressure  on the Commission and Member States,

to show how bad the reality is  so that they are politically forced to move.

the French accountant who blew the lid  on the tax rulings

that Luxembourg gave  to hundreds of companies.

But with a trial in Luxembourg imminent,

when we met him  he was reluctant to shout out loud.

A whispered message,  but no less strong for it.

It seems incredible,  but the rules governing corporate tax 

go back to the new international order  that took shape after the First World War,

to the formation of the League of Nations.

The international tax rules  were designed in the early 1920s

to eliminate double taxation  for cross-border investment.

because they have not kept pace  with the way business operates.

The OECD is changing that,  it's been driving new rules

to get multi-nationals to share earnings  and other key information,

and drive away the fog  of obscurity and non-disclosure.

The financial crisis in 2008 was, I think,  the wake-up call for many governments

that the international tax framework  didn't work well. 

And there was for once a connection with  some political pressure from the people -

the man and woman on the street  couldn't understand

why high networth individuals  could hide billions in tax havens

and why, on the other hand,  some big juicy multi-nationals

wouldn't pay taxes on their off-shore profits

because they could divorce  the location of the profits and activities.

On the question of tax rulings  and tax competition,

which the parliamentary committee has  been focusing on, he is unambiguous.

Tax rulings are here to stay because  as a matter of principle, they are not bad.

Harmful tax rulings are dead,  as of now.

The automatic exchange of information  on the tax rulings 

Tax rulings are made  by the tax administrations

Often on criteria which may support other  objectives, like generating employment.

In Belgium, Geert De Neef  is a lawyer acting for companies

seeking rulings on their tax status  and transactions.

He says the landscape  is already changing fast.

less are interested in the setting up  and the applying of aggressive tax schemes.

If you know that your local tax inspector  has an overall view of your tax revenues

that I'm sure will have a major influence.

Many wanted a Committee of Inquiry  established over a Special Committee,

with powers to interrogate witnesses  and demand documents.

For some, it's been a frustrating 8 months.

We started visiting Member States,  we asked for documents later on,

we now discover that we are not getting  them, surprise surprise! 

They just want to appear as if they are  doing something, but they are not.

Fellow committee member Brian Hayes,  who is from Ireland,

a country which has come in for particular  but he says unfair attention,

believes the past 8 months have helped  to focus minds.

There’s a broader issue that needs  to be put before policymakers now

and the question is aggressive tax planning.

We have to ensure that corporates  big and small pay their fair share of taxes.

Where next then in terms of future steps  to be taken by Parliament?

We believe that European legislation  should go the full way

and not just doing the minimum  that the OECD initiative proposes,

but go beyond that to make sure  that we are tackling the issue

and in Europe that would mean  gradually harmonising or converging

is to make sure we don’t have tax dumping

where effectively the competitive practices  of one country

are so competitive it makes it impossible for  businesses to establish in other countries.

A final word to the man  without whom the debate about tax rulings

might never have come so far so quickly.

This, as Antoine Deltour prepares to fight  charges in Luxembourg

including theft allegations and allegations  that he violated Luxembourg's secrecy laws.

If convicted he faces  between five and ten years in prison.