11. Is concerned about the risks associated with the development of projects that have already been
decided although not yet started and about their possible consequences (it does appear that there is somehaste to enter into new projects before promulgation of the new law which will necessarily seem morerestrictive) and insists, as a matter of urgency on the need to suspend the processing and approval ofintegrated development plans (PAI) which incorporate non-development land into the development process,regardless of whether they are newly formulated or currently being processed, pending the entry into forceof the revised legislation;
12. Recalls that the European Union is founded on the principles of liberty, democracy, respect for
human rights and fundamental freedoms, and the rule of law, principles which are common to the MemberStates, and that Article 7 of the Treaty on European Union provides for a right of initiative of the EuropeanParliament as regards the procedure for determination, by the Council, of a clear risk of a serious breach ofthose principles and that the Commission or one third of the Member States can initiate the procedure forsanctioning a Member State, in the event that the violation persists;
13. Urges the Commission to continue careful monitoring and investigation to ensure the conformity of
the new Valencian Development Law (LUV —Ley Urbanística Valenciana) legislation and its application with
Community law in the area of public procurement and related fields and keep Parliament and its competent
Committee fully informed as to developments in this regard;
14. Calls on the Commission to continue to exercise vigilance in terms of monitoring compliance with
tendering procedures;
15. Wishes to see information about the content of its investigations and its recommendations broadly
disseminated in view of the large number of European citizens concerned (British, German, French, Belgian,
Dutch) as are Spanish citizens themselves;
16. Asks the Commission to draw on the experiences of this episode and, in view of the large number of
EU citizens now buying land in EU countries other than their own, to consider what safeguards —legis-
lative, non-legislative or merely advisory —might be appropriate so as to protect and assist citizens under-
taking such important transactions and investments outside their home jurisdictions, and to report theoutcome of such deliberations to Parliament;
17. Instructs its President to forward this resolution to the Council and the Commission, the Govern-
ment, Parliament and Ombudsman of the Valencian Autonomous Region, the Spanish Government and thepetitioners.
P6_TA(2005)0511
Corporate tax
European Parliament resolution on taxation of undertakings in the European Union: a common
consolidated corporate tax base (2005/2120(INI))
The European Parliament ,
— having regard to the Commission non-papers ‘A Common Consolidated EU Corporate Tax Base ’and
‘Home State Taxation for Small and Medium-Sized Enterprises ’, issued on 7 July 2004 and presented to
the informal Ecofin Council of 10 and 11 September 2004,
— having regard to the informal Ecofin Council of 10 and 11 September 2004 in Scheveningen,
— having regard to the communication from the Commission to the Council, the European Parliament
and the Economic and Social Committee: ‘Towards an Internal Market without tax obstacles. A strategy
for providing companies with a consolidated corporate tax base for their EU-wide activities ’(COM
(2001)0582),23.11.2006 EN C 286 E/229 Official Journal of the European Union
Tuesday 13 December 2005
— having regard to communication from the Commission to the Council, the European Parliament and
the Economic and Social Committee: ‘An Internal Market without company tax obstacles: achievements,
ongoing initiatives and remaining challenges ’(COM(2003)0726),
— having regard to the communication of 2 February 2005 from Commission President Barroso, in agree-
ment with Vice-President Verheugen, to the Spring European Council: ‘Working together for growth
and jobs, A new start for the Lisbon Strategy ’(COM(2005)0024),
— having regard to having regard to the communication of 12 April 2005 from Commission President
Barroso, in agreement with vice-President Verheugen and Commissioners Almunia and Spidla, on Inte-
grated Guidelines for Growth and Jobs (2005-2008), including a Commission recommendation on the
broad guidelines for the economic policies of the Member States and the Community and a proposalfor a Council decision on guidelines for the employment policies of the Member States (COM(2005)0141 —2005/0057(CNS)),
— having regard to its resolution of 14 March 2002 on the Commission communication to the Council,
the European Parliament and the Economic and Social Committee on tax policy in the EuropeanUnion (
1),
— having regard to its position of 16 December 2003 on the proposal for a Council directive amending
Directive 90/435/EEC on the common system of taxation applicable in the case of parent companiesand subsidiaries of different Member States (
2),
— having regard to its position of 10 March 2004 on the proposal for a Council directive amending
Directive 90/434/EEC of 23 July 1990 on the common system of taxation applicable to mergers, divi-
sions, transfers of assets and exchanges of shares concerning companies of different Member States (3),
— having regard to Council Regulation (EC) No 2157/2001 of 8 October 2001 on the Statute for a
European Company (SE) (4),
— having regard to Council Directive 2001/86/EC of 8 October 2001 complementing the Statute for a
European Company with regard to the involvement of employees (5),
— having regard to the study on an analysis of potential competition and discrimination issues relating to
a pilot project for an EU tax consolidation scheme for the European Company Statute by the DeloitteEU Tax Group of 18 August 2004 (Taxud/2003/DE/305),
— having regard to the Commission's European Tax Survey of 10 September 2004 (
6),
— having regard to the study ‘Effects of the proposed Directive on Services in the Internal Market on Tax
Collection and Tax Revenue in the EU Member States ’, a research study by the Austrian Institute of
Economics commissioned by the European Parliament's Directorate-General for Internal Policies of theUnion, Directorate A —Economic and Scientific Policy (Project No IP/A/ECON/ST/2004-33),
— having regard to Rule 45 of its Rules of Procedure,
— having regard to the report of the Committee on Economic and Monetary Affairs (A6-0386/2005),
A. whereas the Treaty establishing the European Community provides in Article 94 for the approximation
of laws, regulations and administrative provisions of the Member States which affect the functioning ofthe internal market,
B. whereas, at the Spring European Council in March 2005, the European Union laid down the funda-
mental lines for the re-launch of the Lisbon Strategy, based on knowledge, competitiveness, growth andemployment,
(1) OJ C 47 E, 27.2.2003, p. 591.
(2) OJ C 91 E, 15.4.2004, p. 84.
(3) OJ C 102 E, 28.4.2004, p. 569.
(4) OJ L 294, 10.11.2001, p. 1.
(5) OJ L 294, 10.11.2001, p. 22.
(6) European Tax Survey, Working Paper No 3/2004.C 286 E/230 EN 23.11.2006 Official Journal of the European Union
Tuesday 13 December 2005
C. whereas the removal of any obstacles which hamper the proper functioning of the internal market in
the bases of company taxation is an important element in the competitiveness of European enterprises,according to the new ‘integrated guidelines ’,
D. whereas phenomena such as economic integration, restructuring, cross-border mergers and increased
international competition make it necessary to overcome any tax obstacles which impede the comple-tion of the internal market and economic growth,
E. whereas the continuing existence of differing bases for company tax systems produces obstacles to
companies' cross-border activities, with administrative and economic inefficiencies,
F. whereas the existence of 25 different tax systems entails not only costs and inefficiencies for European
companies which have cross-border activities but also losses for the Member States, owing to fraud,transfer pricing for tax purposes and tax evasion, as well as a number of problems relating to tax law,
G. whereas factors giving rise to distortions of competition must be countered and whereas a properly
functioning internal market must create the conditions for enterprises to enjoy a level playing field,
H. whereas the issue of company taxation within the internal market is also important in legal terms, as is
shown by the increasing number of legal disputes and proceedings in this field, whereas the judgmentsof the Court of Justice of the European Communities concerning the Member States' arrangements withregard to company taxation have always reaffirmed the prohibition on discrimination and restrictionand whereas it is necessary to address the legal uncertainties arising from the fact that the commonconsolidated corporate tax base (CCCTB) (as possibly adopted in the future in the framework ofenhanced cooperation) could apply to companies and branches established in countries which do not
wish to adopt the CCCTB,
I. whereas the approach adopted by the Commission regarding the introduction of a common consoli-
dated corporate tax base is utterly balanced, provides the most appropriate solution for large com-panies, and must be treated as the priority measure to be implemented at European level in the areaof company taxation; whereas the home State taxation option for SMEs could constitute a form ofsimplification for entrepreneurs, provided that the Member States conclude the necessary bilateral ormultilateral conventions,
J. whereas the purpose of the common consolidated corporate tax base should be to create a common
tax base at European level for companies that have cross-border activities and are established in at leasttwo Member States, which will be more efficient, transparent and conducive to investment in thecontext of an effective single European market,
K. whereas the Commission proposal for a pilot project based on the system of home State taxation could
be a realistic and effective instrument for reducing compliance costs and removing the fiscal andadministrative obstacles affecting the activities of SMEs in areas with comparable levels of effectivetaxation in the respective Member States, and whereas such a system introduces substantial simplifi-cation, whereby the owner of a small or medium-sized enterprise is required to know and apply onlynational tax rules in order to be able to operate throughout the internal market,
L. whereas the creation of a common consolidated tax base can be of no value if it is not efficient, trans-
parent and competitive,
1. Notes that European companies operating in the internal market are hampered by tax obstacles, prob-
lems of double taxation and high compliance costs when they invest or operate in another Member State;
2. Points out that the obstacles created by very divergent national bases of company taxation applying to
enterprises which have cross-border activities in the European Union have a negative effect on economicgrowth and corporate competitiveness in both the internal market and the international market;23.11.2006 EN C 286 E/231 Official Journal of the European Union
Tuesday 13 December 2005
3. Reiterates that closer cooperation between the Member States is needed with regard to the bases of
company taxation, in order to remove the tax obstacles linked to specific issues such as:
— cross-border offsetting of profits and losses,
— transfer pricing for tax purposes,
— merger and acquisition operations,
— cross-border restructuring operations and the payment of dividends between associated companies;
4. Affirms the need for reform of the bases of company tax for companies operating in the internal
market, in furtherance of the new Lisbon Strategy, so as to ensure equal treatment for enterprises, adminis-trative simplification and cost reduction and to promote greater investment, corporate competitiveness,growth and job creation;
5. Welcomes the Commission's new proposals concerning the introduction of a common consolidated
corporate tax base at European level for large companies and the experimental and considered introductionof the system of home State taxation for SMEs, and notes the creation of the CCCTB Working Group;
6. Regrets that some Member States still reject the need for greater cooperation on tax matters, in par-
ticular with regard to the tax bases applicable to companies, bearing in mind the fact that coordinationbetween the Member States with regard to company taxation is one of the instruments laid down in the‘integrated guidelines ’;
A common consolidated corporate tax base at European level
7. Stresses the importance of adopting a common consolidated tax base which will fulfil the requirement
of greater integration in the internal market; supports the Commission proposal and is convinced that theintroduction of a common consolidated tax base for companies established in at least two Member States —
a base which will make it possible to determine the taxable revenue according to a set of common rulesdefined at European level and applicable to an individual group of companies —is the best way of tackling
effectively the tax obstacles hampering companies' cross-border activities;
8. Reaffirms that the introduction of a common consolidated corporate tax base will not in any way
prejudice the fundamental prerogatives of the Member States regarding tax matters, and in particular theirright to set the rates of national corporation tax; believes, however, that harmonisation of the corporate taxbase will create the conditions for more transparent public and fiscal policies and enable capital to be put tothe best possible use, thereby helping to attain the Lisbon goals;
9. Reiterates that the objectives of the creation of a common consolidated corporate tax base at European
Union level are:
— the removal of the barriers set up by different national tax systems,
— administrative simplification and a reduction in the burden of bureaucracy and in compliance costs,
— the creation of common conditions of equal treatment for companies which are established in various
Member States,
— the removal of the mirror-image problems of double taxation and tax evasion;
10. Believes that the best way of ensuring the creation of a common consolidated corporate tax base at
European level is to define a framework of common standards via a regulation based on two key, com-plementary elements: the creation of a common tax base in accordance with European rules and the devel-opment of a method of consolidation, as well as a method of tax base apportionment among the MemberStates concerned, which will allow companies to offset and consolidate profits and losses globally through-out the European Union;C 286 E/232 EN 23.11.2006 Official Journal of the European Union
Tuesday 13 December 2005
11. Considers that the objective of introducing a CCCTB at European level could also be achieved
through the mechanism of enhanced cooperation if Member States are unable to reach unanimous agree-ment; underlines that the mechanism of enhanced cooperation —though representing a second-best option
compared to the unanimous agreement of Member States —will, at the same time, allow the great majority
of European countries to progress in the field of a common framework for company taxation in the internalmarket while affording the other Member States the possibility of joining in at a later stage;
12. Advocates a step-by-step approach, with the initial introduction of an optional common consolidated
tax base —which will leave enterprises the choice between existing national tax bases and a European tax
base —followed by an assessment in the medium term to examine the advisability of moving to a com-
pulsory common consolidated tax base;
13. Considers that legislation by the European Union to introduce a common consolidated tax base must
at least lay down:
— the common tax principles used as a reference point at European level,
— all the rules and mechanisms needed to define a common European tax base,
— the rules relating to the procedures for implementing consolidation for groups of companies,
— the link between companies' legal and tax accounting operations, that is the accounting principles
underlying the determination of taxable revenue for tax purposes,
— the mechanism for apportioning the tax yield derived from the common consolidated tax base when it
is chosen by groups of companies among the Member States, which must be governed by the principleof transparency and good administration;
14. Urges the Member States to step up their cooperation on tax matters, and acknowledges the import-
ance of the goal of providing adequate safeguards for the legitimate financial interests of the Member States,
and in particular the capacity to collect tax revenue, by means of an equitable, transparent, proportionate
and accepted apportionment mechanism;
15. Asks the Commission to assess at a later stage, and after an analysis of the consequences, the advis-
ability of applying tax arrangements based on a common consolidated tax base to the Statute for a Euro-pean Company;
The system of home State taxation for SMEs
16. Notes that SMEs are not succeeding in taking full advantage of the internal market, and that their
potential for growth, in terms of markets, cross-border activities and the capacity to establish themselves inother Member States, falls foul of obstacles arising from administrative complexity and the high costs ofcompliance with the different national tax systems, which have proportionately a far greater impact onSMEs than on large companies;
17. Considers that the system of home State taxation could, subject to the conclusion of bilateral or
multilateral agreements among Member States dealing with all technical issues and establishing a mechanismfor sharing the tax revenue among the different national tax administrations involved in order to avoidharmful tax competition, constitute a considerable simplification for the cross-border activities of SMEs;supports the Commission proposal for a pilot project based on this system, which will make it possiblefor SMEs to calculate the taxable revenue of the parent company and of all the branches and subsidiariesestablished in other Member States participating in the project by applying the tax rules in force in theirhome States;
18. Points out that, in the new Lisbon Strategy and in the framework programme for innovation and
competitiveness (2007-2013), support for SMEs is a priority objective, and is convinced that the pilot pro-ject can have a positive effect on the survival rate of SMEs and on their competitiveness at European andinternational level;23.11.2006 EN C 286 E/233 Official Journal of the European Union
Tuesday 13 December 2005
19. Deplores the fact that the Member States are not showing the requisite interest in and commitment
to getting rid of tax obstacles which hamper the activities of SMEs, and that they are making no effort toimplement the pilot project proposed by the Commission; urges the Member States, and in particular thosewith economically integrated cross-border regions, to join the pilot project and thus supply worthwhile,reproducible experience;
*
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20. Instructs its President to forward this resolution to the Council and the Commission.C 286 E/234 EN 23.11.2006 Official Journal of the European Union
Tuesday 13 December 2005