Two years after the “Paradise Papers”, the exposure of incriminating tax data of ca. 300.000 letterbox companies in Panama by the International Consortium of Investigative Journalists ICIJ, the European Parliament’s Special Committee on Financial Crimes (TAX3) invited to a public hearing on 21st June 2018 to sound out the current situation with regard to international tax avoidance and evasion.

Status quo and potential for change

The Company Law package, which shall harmonise and digitize the cross-border conversion, fusion and division of a large variety of national forms of company, is currently undergoing its first reading in the European Parliament. A public hearing (21.6.) of European social partners and experts in the Committee on Legal Affairs (JURI) should provide MEPs with ideas for improving the legislative proposals.

A Europe-wide reform of “national proliferation” in Company Law is necessary - so the consensus of the panelists from social partnership and science at this week’s conference “Ensuring Fair Mo-bility of Companies”. However, how the Company Law package, which had been presented at the end of April 2018, could be made socially fair, had yet to be debated. Within the framework of two Directives, the package aims at digitising and harmonising respectively the division, conver-sion and fusion of and between different national Company Law structures of the Member States.

The Austrian Federal Chamber of Labour (BAK) and the Austrian Trade Union Federation (ÖGB) support trade relations in principle, as long as they are conducted according to fair conditions. However, such conditions are not guaranteed under the a.m. agreements, as was the case with CETA. It should be noted that the scope of application of the new generation of agreements far exceeds that of traditional trade agreements, whose primary role was merely to lower import duties and quotas.

Last week the Commission presented the new company law package. The fact that the presentation of the Commission’s proposals had been delayed several times indicates that this is a politically sensible issue. On the one side, companies and their associations request that they are given the opportunity of setting up corporations anywhere in Europe, if possible at the push of a button.

Slowly but surely MEPs are losing their patience. Almost a year ago, in July 2017, the European Parliament had adopted its position on the so-called public Country-by-Country Reporting. The aim was to make it more transparent, in which country multinational corporations generate their profits and how much tax they pay. Since its adoption by MEPs, the ball is now in the corner of the Member States. However, there is little tangible progress as individual countries apply delaying and blocking tactics.

The event hosted by AK and ÖGB Europa offered the opportunity on 27th March to dis-cuss how to rate the new foray by the European Commission into the digital tax. Milena Mathé, European Commission (Tax Analysist at DG TAXUD) and Giorgia Maffini, OECD (Deputy Head of International Tax Unit) presented solutions as outlined by two of the most important forums in international tax issues. Also participating in the panel discus-sion were Evelyn Regner, MEP, and Dominik Bernhofer, Head of Tax Policy Unit of the AK.