Multinationals given another opportunity to appear before EU Parliament tax committee

The TAXE Committee will organise a new hearing on 16 November and will invite all the multinationals that have previously declined to appear before the Committee. These include Amazon, Fiat and Facebook, according to the announcement.

 “In the UK, Select Committees have wide, if rarely-used, powers to compel attendance, including the ability to fine or imprison those in contempt," said tax expert Heather Self of Pinsent Masons, the law firm behind Out-Law.com. "In practice, the last time a fine was issued was in 1666."

"The EU is now clearly seeking to flex its muscles, by denying other privileges to those who decline to attend voluntarily. It remains to be seen whether those who attend are prepared to give more than minimal answers, however,” she said.

TAXE committee chair Alain Lamassoure said: "I hope that, this time, multinational companies will seize the opportunity to share their views with us on current developments in the corporate tax world. The OECD has presented its action plan against Base Erosion and Profit Shifting (BEPS) and the Commission consultation on Common Consolidated Corporate Tax Base (CCCTB) has now started. We are very keen to hear their take on these issues."

In June MEPs expressed "regret" that multinationals "seem unable to find time to discuss their tax practices in public before the European Parliament’s Tax Rulings Committee, despite its best efforts to accommodate them".

The TAXE committee decided in September to ask President Martin Schultz to ban or restrict access from the Parliament the companies that had declined to appear before the committee in relation to its investigations into tax rulings and other tax practices.

TAXE was launched in February to look into allegations that some member states were using special tax regimes that favour large corporations. The special committee is studying member states’ tax rulings as far back as 1991. It is also reviewing how the European Commission treats member states' existing state aid arrangements and how transparent EU countries are about their tax rulings.

The committee is expected to present its findings and recommendations in a final report that is expected to be voted on by all MEPs in November.

The European Commission said on 6 October that the Economics and Financial Affairs Council of the European Union (ECOFIN) had reached agreement on a directive which would require EU member states to exchange information automatically on advance cross-border tax rulings and pricing arrangements. This would remove the current discretion given to member states on what information they share, when and with whom, the Commission said at the time.

However, members of the European Parliament's Economic and Monetary Affairs Committee have described the agreement on a directive for the automatic exchange of information on tax rulings as a "missed opportunity".

In 2014 the European Commission launched in-depth investigations into tax incentives given to Apple in Ireland, Starbucks in the Netherlands and Fiat Finance and Trade and Amazon in Luxembourg constitute illegal state aid. Shortly after these investigations were opened over 340 multinational companies were exposed for securing secret deals from Luxembourg in order to save billions of dollars in taxes. Hundreds of documents were leaked that showed some companies paying an effective 1% rate of tax on profits moved from higher tax jurisdictions to Luxembourg through the use of private tax rulings – also known as ‘comfort letters’ or advance pricing arrangements (APAs).

The Financial Times has reported that Margrethe Vestager, the EU’s competition commissioner, has postponed a trip to China so she could finalise cases concerning Fiat in Luxembourg and Starbucks in the Netherlands. The decisions could be released as early as next Wednesday. The paper reported that cases involving Apple in Ireland and Amazon in Luxembourg "appear to be on a slower track".