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TAXE Committee and MNCs

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Back in June and July of this year, the European Parliament TAXE Special Committee called a wide range of multinational companies from Google and Facebook to HSBC and IKEA to appear at hearings to discuss their tax practices. Unlike the Public Account Committee in the UK, the TAXE Committee does not have the power to compel people to attend. So it comes as little surprise that many have chosen not to appear. In fact, only four of the 18 have faced the Committee, being Airbus, BNP Paribas, SSE and Total.

On 16 October, the Committee announced that it would give the remaining companies ‘one more chance’ to appear before them on 16 November. 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.’

What is clear is that the Parliament is really riled by not having been able to question these companies.

Someone close to the Brussels debate has suggested to me that the recent BEPS announcements might make now the right time for these companies come forward, ‘blinking into the sunlight’. It is likely they would face some predictable questions. BEPS might provide some on the answers for them. Indeed, it could be the opportunity to diffuse some other challenges. Beyond the usual names on the list, companies like McDonalds are already facing tax challenges in France, Italy and possibly elsewhere, as well as being on the periphery of the state aid work by DG COMP. Perhaps the time has come to extract the thorn?

In reality, the hands of the TAXE Committee are quite firmly tied. They cannot force companies to appear, but have taken the step of writing to Martin Schulz, president of the European Parliament, calling on him to impose restrictions on those who refuse. This could include removing access to the European Parliament for them and their lobbyists. Although Schulz cast some doubt over whether such sanctions are within his power, he echoed the frustrations of the TAXE Committee.

It will be interesting to see whether those companies on the list choose to attend in November, and what the European Parliament’s response might be if they choose not to. At a time when Brussels is setting out its stall in terms of BEPS adoption, and considering the impact on businesses, companies may think that now is the time to be at the table.

The TAXE committee was set up in the wake of Luxleaks to investigate tax rulings afforded to multinational companies.

Multinational corporations invited to appear in TAXE special committee meetings