by Julie Martin
Representatives of large multinationals have again been called to defend their companies’ tax avoidance practices before an EU parliamentary committee.
This time, Apple, Google, Fiat, IKEA, and McDonald’s executives will testify before The Special Committee on Tax Rulings (TAXE2), a temporary committee established by the EU Parliament. TAXE2 has invited the multinationals to speak on March 15 about corporate taxation inside and outside the EU.
Scheduled to testify are Google’s Head of Economic Policy (EMEA), Adam Cohen, and IKEA’s Søren Hansen, CEO of the Inter IKEA Group. Representatives of McDonald’s and Fiat will also speak, but have yet to be identified.
Starbucks declined its invitation to attend on the grounds that it is challenging in court the EU Commission’s October 2015 decision that the company’s Dutch subsidiary received state aid from the Netherlands through overly-generous advance pricing agreements that lowered its tax liability. The Commission has ordered the Netherlands to collect the unpaid tax from Starbucks.
Members of the European Parlaiment will be sure to mention at the hearing that, unlike Starbucks, Fiat has agreed to appear even though the company is challenging a similar Commission state aid decision in EU court.
The TAXE2 committee said the meeting will include discussion of “the global standards of the OECD’s Base Erosion and Profit Shifting (BEPS) Action Plan adopted by the G20 last autumn, as well as major initiatives presented by the Commission, such as the recent Anti-Tax Avoidance Package and the re-launch of the Common Consolidated Corporate Tax Base (CCCTB).”
While the meeting is characterized as a discussion, it will in fact most likely to be used as another opportunity for EU politicians to shine the spotlight on the tax avoidance maneuvers of large multinationals so as to garner public support for closing down the loopholes that allow MNEs to avoid tax.
This practice dates back to November 2013, where the UK Public Accounts Committee (PAC), headed by MP Margaret Hodge, held similar hearings credited to have raised public awareness in the EU about multinational tax avoidance practices.
In fact, US Treasury official Robert Stack, this week in Florida, acknowledged that US MNEs have lost the global public relations battle over international tax, according to a report by Bloomberg BNA.
The EU Parliament’s TAXE2 committee is investigating tax avoidance under a six month mandate approved by the plenary on December 2, 2015.
The committee’s predecessor group, known as TAXE1, also under a short-term mandate, similarly called on representatives of large MNEs to testify about their companies’ tax affairs. Testifying at that committee’s November 2015 hearing were representatives of Amazon, Barclays Bank, The Coca-Cola Company, Facebook, Google, HSBC, IKEA, McDonald’s, Philip Morris, Anheuser-Busch, and The Walt Disney Company.
– Julie Martin is a US tax attorney and a member of MNE Tax’s editorial staff.
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