The European parliament’s special committee on tax rulings is seeking to extend its mandate by six months, in order scrutinise more documents and monitor legislation relating to corporate tax practices at global businesses, after its most recent session saw MEPs grill 11 multinational companies in a five-hour debate
The companies had declined the committee’s first invitation to appear before it, but later changed their minds and accepted a last chance offer. Of the 13 original invitees, only Fiat Chrysler and Walmart declined to attend.
During the session, Google was asked about its Bermuda subsidiary, and Facebook was asked why it stored its intellectual property rights on the Cayman Islands.
The committee’s summary says most companies insisted that their tax practices were legal and pointed to the large numbers of staff they employ in EU member states. Most were unenthusiastic about the idea of country-by-country reporting, especially if these mandatory reports were to be made public, and objected to the administrative burden that they would impose.
But they said that a common consolidated corporate tax base (CCCTB) would be welcome if it made the rules more consistent and clear. Several firms also advocated a binding mediation mechanism in the case of tax disputes.
In addition, the multinationals answered questions about transfer pricing practices and their response to the OECD’s Base erosion and Profit Shifting (BEPS) proposals, released last month.
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