The European Commission has tabled proposal to combat the use of shell companies for tax purposes.
Comment on the issue came from Markus Ferber MEP, the EPP Group’s Spokesman in the Economic and Monetary Affairs Committee.
“Often the main purpose of shell companies is to facilitate aggressive tax planning or disguise beneficial ownership structures. In theory, Member States have a wide toolkit available to tackle the misuse of shell companies, but they have failed to make good use of it. It is high time for the EU to step up its game by defining common tax-related substance requirements. In the Single Market, we simply need a common European understanding of what constitutes a company and what constitutes a tax shelter. No more shelter for aggressive tax practices!”, said Ferber.
He said the main initiatives should also include a monitoring mechanism to verify the effectiveness of measures already taken by Member States.
Further comment comes from Lídia Pereira MEP, EPP Group Spokeswoman in the Subcommittee on Tax Matters who said, “We have been asking the Commission for years to correct the lack of sufficient and accurate data in national registers that can be used to identify ultimate beneficial owners, especially in situations in which a network of shell companies is used. We hope that our call will finally be heard and we stand ready to work together with the Council, improving our legislation. European taxpayers expect the EU to guarantee tax transparency and fairness within the Single Market”.
“There is a severe risk that shell companies will simply relocate to jurisdictions outside the European Union. Therefore, we do not only need clear standards within the EU, but we also need to sharpen our weapons when it comes to shell companies that interact with the EU, but are located in a third country”, said Markus Ferber.
“The biggest risk to this initiative, however, is that it becomes yet another victim of the Council’s hesitation on the decision-making process in tax matters. The recent failure of Member States to even agree on very modest changes to the code of conduct on business taxation does not bode well in this regard”, concluded the MEPs.