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Progress on tax compliance and transparency

18/04/2016 16:45
Cyprus is on the right track to comply with transparency and tax compliance decisions taken both on an EU and OECD level as well, Alain Lamassoure, Chairman of the European Parliament`s Special Committee on Tax Rulings and Other Measures Similar in Nature or Effect (TAXE 2) has said adding that more progress is needed.

Heading a Committee delegation, Lamassoure discussed taxation and transparency issues with the Ministry of Finance Permanent Secretary, Christos Patsalides, the Taxation Department and the Finmin`s Head of Taxation Division.

“We have appreciated the progress made and Cyprus is on the right track to comply with decisions already made or recommendations on the table on the EU and OECD level but there is still progress to be made,” Lamassoure said in joint statements with Patsalides.

The French MEP said the European Commission by the end of the year will table a proposal for the Common Corporate Consolidated Tax Base (CCTB) which aims at securing a common definition on taxable profit for corporations across the EU. This will stop multinational companies benefiting from low tax regimes and favourable rulings in the EU.

Both Lamassoure and Jeppe Kofford a co-rapporteur on TAXE2 said that Cyprus has one of the lowest tax on intellectual property in the EU that amounts to 2.5%.

However Michael Theurer also TAXE 2 co-rapporteur, said that Cyprus is not among the countries benefiting multinational corporations with zero-taxation, noting that Cyprus has made major progress in this field.

“Our political aim is to have among the 28 member-states the same definition of the taxable profit including for intellectual property, the same definition and every member state will remain free to set the rate of the tax,” Lamassoure adds.

Referring to the Panama Papers which revealed that politicians and celebrities hide their money in tax havens, Lamassoure said he encourages the Cypriot authorities to do their utmost in investigating the leaked files.

“All of us are involved in these papers somehow and we need to launch judicial enquiry and secure that all the information available in our respective countries, banks or audit firms remains available or not destroyed,” he said.

We are now rapidly working to identify tax havens and blacklist them because is a matter of urgency in the light of the Panama papers, said Koford.

On his part Patsalides noted that Cyprus has complied with all requirements concerning tax compliance transparency as set out both by the EU, the OECD and the OECD`s global forum on transparency.

But he noted that Cyprus would not accept an EU-wide common tax rate as this would remove another economic foreign policy tool, that is fiscal policy. “Without fiscal policy and without monetary policy, the role state in shaping its internal economic policy is being limited,” he said.

On the Panama Papers, Patsalides noted that the noise surrounding this issue does not help Cyprus and its endeavor of the past years to show globally that it is a credible international services hub.

“This has been acknowledged both by the EU institutions and the OECD and the Global Forum,” he said noting “linking Cyprus with the Panama Papers and a small fracture possibly associated with Cyprus is not correct.”

Patsalides reminded that the President of the Republic and the Finance Minister have instructed the Taxation Department to investigate the information that emerged from the leaked documents of the Mossack Fonseca law firm.