EU Taxes: EP Resolution Targets Multinationals by Mossack Fonseca

On November 25, 2015, the European Parliament (EP) approved a resolution to make corporate taxes “fairer across Europe”. The resolution calls on EU member states to “agree on mandatory country-by-country reporting by multinationals of profits and taxes, a common consolidated corporate tax base (CCCTB), common definitions for tax terms, and more transparency and accountability with regard to their national tax rulings for companies”, a press release issued by the EP said.

If the EP resolution (as it stands) is passed into law by the European Council it would result in the following:

•Large multinational corporations would have to pay taxes in the countries where most of their financial activities and profits are made

•Smaller EU economies that offer more competitive corporate tax rates with fewer regulations would stand to lose significant tax revenues as multinationals migrate out of their jurisdictions

•Jurisdictions outside of the EU would attract multinationals with more favorable tax and regulatory schemes

A Comparison of EU VAT Tax Rates as of 1 January 2015:

Sources: the Malta Independent and the European Parliamentary Research Service

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