GUE/NGL’s Motion for a resolution on the Cum-Ex dividend arbitrage

After discussions at the October II plenary in Strasbourg, it was decided that the political groups would present Motions for a Resolution on November 7th, which would be voted in next week’s Strasbourg plenary.

You can see GUE/NGL’s Motion for a Resolution here, signed by MEPs Dimitrios Papadimoulis, Miguel Urbán Crespo, Martin Schirdewan, Marisa Matias, Jiri Mastalka, Patrick le Hyaric,  Martin Schirdewan, Katerina Konecna,  Marie-Christine Vergiat, Merja Kyllönen, Kostadinka Kuneva,  Sofia Sakorafa, Paloma Lopez Bermejo, Emmanuel Maurel, Younous Omarjee, Stelios Kouloglou.

Given the case, and GUE/NGL’s interventions in plenary, GUE/NGL:

  1. Notes with concern that the Cum Ex Scandal has shaken citizens’ trust in the European Union’s and national tax systems; stresses how crucial it is to restore public confidence and ensure that any damage caused will not be repeated; in this respect the European Parliament calls on the European Commission and Member States to enhance their cooperation and exchange of information in order to optimise the quality of the investigations on the total amount of money stolen from Member States and the tracing of such funds;
  2. Calls for in-depth investigations to be carried out by the European Supervisory Authority (ESA) – as foreseen in Article 22, paragraph 4 of ESA’s regulations- in order to assess potential threats to the integrity of financial markets or the stability of the financial system and make appropriate recommendations for action to the competent authorities concerned;.
  3. Calls for the European Banking Authority (EBA) to analyse the role credit institutions played and play in the dividend arbitrage exposed by the Cum-Ex scandal;
  4. Encourages the national courts of audit to carry out an audit of the capital gains tax refund procedure with regard to dividend and share transactions to identify the possible damages due to the Cum-Ex scandal and the existing loopholes at national level;
  5. Calls on the Authorities to open criminal investigations and impose penalties and sanctions accordingly to the parties involved in this scandal;
  6. Calls for the temporary freezing of assets of the prosecuted parts in order to give the opportunity to the Authorities to investigate the status of affairs;
  7. Calls for a special inquiry of the management boards of banks involved in such fraudulent transactions;
  8. Calls for the need of an ambitious Directive on public country-by-country reporting in order to enhance tax transparency and public scrutiny of multinational enterprises (MNE’s) as it would allow the wider public to have access to information about the profits made, subsidies received and the taxes they pay in the jurisdictions where they operate; urges the Council to reach a common agreement on the proposal to enter into negotiations with the other institutions in order to adopt a public CBCR, one of the key measures to find greater transparency on tax information of companies for all citizens;
  9. Calls on the Member States to intensify their cooperation in tax matters through automatic exchange of information, as well as the cooperation between Financial Intelligence Units through, improving transparency, administrative cooperation and coordination and information exchange, as well as creating an Early Warning Mechanism;
  10. Calls for the arm’s length principle, as well as double taxation agreements which have facilitated and legalized double non taxation, negative taxation (as in the Cum-Ex Scandal) and tax avoidance to be eradicated; and replaced for a system that places the economic reality above the fiction of the contracts; and which provides a new coherence to EU tax policy that will allow it to tackle tax avoidance, tax evasion and tax fraud in a more effective manner;
  11. Calls for the European Commission to stop encouraging Member States to adopt systems of relief-at-source from withholding taxes;
  12. Calls for Special Purpose Vehicles and Special Purpose Entities to be inhibited to be created and trade in the EU;
  13. Calls for a Commission report to address the legal loopholes and come up with new upgraded policy measures to tackle dividend arbitrage practices; and calls on the European Commission to take the necessary steps to prevent traders exploiting loopholes in tax legislation, which cause immense damage to EU Member States and taxpayers;
  14. Reaffirms the urgent need for a fundamental overhaul of the European banking landscape and for real financial market reforms by ending too-big-to fail and by ensuring that banks serve the real economy rather than to engage in financial market speculation and tax fraud;
  15. Underlines that big international tax firms and legal advisors advising clients, and acting as enablers and promoters of tax fraud, should be held legally co-responsible when designing ‘cum ex’ transactions and aggressive tax plans against the public interest; points out that when they take part in fraud, they must systematically be liable for both penal sanctions and disciplinary measures;
  16. Regrets that the recently passed Council Directive 2018/822/EU of 25 May 2018 (DAC6), would not have enabled the exchange of information on the cum-ex transactions, as they would not be considered as reportable transactions; and calls for DAC6 to be amended in order to require the mandatory disclosure of dividend arbitrage schemes;
  17. Calls for a code of conduct for banks, tax advisors, law, accounting and investment firms;
  18. Regrets the fact that austerity policies have resulted in systematic and generalized resource and personnel reductions in EU tax administrations; urges Member States to provide tax authorities with the necessary administrative capacity, human and IT resources to deal with the risks that could lead to multiple refunds, which in many cases, such as Cum-Ex scandal, continue for long period, despite relevant warnings by tax administrations and experts;
  19. Stresses the need for the protection of whistle-blowers, who disclose information on tax fraud and tax evasion at national and EU level; invites anyone who has information of value for the public interest to report it to the national authorities; and calls for the proposal for a directive of the European Parliament and of the Council on protection of persons reporting on breaches of Union law to be supported considering the opinions voted in the different European Parliament Committees;
  20. Reiterates that a permanent subcommittee into tax evasion, tax avoidance and money laundering, should be established as soon as possible, following the recommendations voted in Plenary on 13 December 2017[1];

[1] Texts adopted, P8_TA(2017)0491.