Mr. Paul Tang:

I thank the committee for inviting us here. We are very glad to be here. It is not a coincidence that the committee sees two rapporteurs on two separate files, one with two Cs and one with three Cs, because Mr. Alain Lamassoure and I believe they belong together. It is a statement in itself that the two of us have come here together.

I will quickly outline the context. The European Parliament does not have competence in taxes but can advise on tax matters. We decided not to do it only in Brussels but to come out and tour member states. We are happy to be here. We started in Estonia and then went to Luxembourg, Brussels, The Hague, Berlin and Paris. We will move on to Vienna, Bucharest and Sofia. Our aim is twofold. First, it is to hear the concerns and put national parliaments in a better position. At the end of the day, it will be decided in the capitals, not in Brussels. We also want to hear the concerns and give better advice. We also wanted to put it on the public and political agenda because it is a change that needs to come. Why do we think that? If one looks at the corporate tax systems, as we have done, they are from a time when we had factories with chimneys and smoke. We knew where the location was and that has changed dramatically. One could say globalisation is meaningless. Part of the activity has become mobile and global. That does not mean that we relocate a headquarters or factory all of a sudden but on paper, one can do a lot. Any financial construction can be located anywhere in the world. One can locate one's intellectual property anywhere in the world. With a digital platform like Google or Facebook, it is unclear where one operates. This has given the corporates huge advantage in the systems from the 20th century by choosing where to locate part of their activity. That is the game that is going on. They can choose their location. What the CCTB does is change the rules of the game. One takes profit and allocates profit, meaning it is no longer firms that decide where the profits are being made and where the taxes are being paid. Now, it is the countries that say we consolidate the accrued profit and we allocate the profits; this changes the rules of the game dramatically. That is the reason we are together. We think the two files - one is on the tax base and one is on the consolidation - belong very much together. There is no benefit from this change unless the consolidation is introduced, which changes the rules of the game.

It is interesting. What we see here is a somewhat broad coalition and sometimes an awkward coalition.

Mr. Lamassoure is a French republican. I am a lefty social democrat. We also work with a conservative CSU from Bavaria. People from Bavaria are, by nature, very conservative I think. However, we also work with a revolutionary from Belgium. These are the people who work together. This not only true within the Parliament but also outside it. I can talk with activists, small and medium-sized enterprises and big corporates. They all seem to think the rules of the game need to be changed. I hope that the European Parliament will show that we have a broad coalition. We will have the first vote in committee in February. Later, it will go to plenary. I hope we will see a broad coalition driven by this simple notion that the rules of the game need to be changed. The consolidation part is essential and the second part, already highlighted, is that we need to tax the digital economy.

I know that in Ireland there will be a reference to base erosion and profit-shifting, BEPS. I think BEPS has done wonderful work within the OECD agreement. However, remember there are 15 action points. The first action point was taxing the digital economy. The first action point was no action. We will study it for five more years. Anyone who refers back to the OECD is just dragging their feet. It cannot be claimed that firms should pay a fair share, I think we all agree that they should, and at the same time refer back to the OECD. The OECD is stuck on taxing the digital economy. It is pretty obvious the US wants to have the right to tax or not to tax the digital giants. That is a huge conflict of interest between the EU on the one hand and the US on the other.

We think we need a European initiative to break this deadlock. To do that properly, we can look at the turnover tax that has been put forward by, among others, Bruno Le Maire. However, it needs to be done in a proper way. Then look at profits. We think that the CCCTB is a fundamental approach for also taxing the digital platforms in this world. I am referring to Google and Facebook, for example, but also to Amazon, Airbnb, Uber, etc.

I will try to keep it short. I know the discussion. I am happy to have this discussion here but I can sort of feel what the discussion will be like because I am from the Netherlands. I have similar discussions in my country. If we do not compete we will lose jobs. That is a very general and important argument. I am from a social democratic family. Jobs are important. My point of view is what we have seen is, in effect, a lot of paperwork. Just look at the statistics. If we look at foreign direct investment, that is really strange. Luxembourg and the Netherlands together have more inward foreign direct investment than the US. Ireland has more inward foreign direct investment than Germany or France. It just shows the investment has no relation at all with the real economy. This is my point of illustration. I know that Ireland is like the Netherlands, a gateway to Europe. Ireland has an important role in the European economy and has been very successful in that. However, part of that is not necessary. That is the paperwork and rerouting through financial constructions and location of intellectual property. This is the claim. I understand the concerns and I encounter them in my own country. However, I do not think they are necessary. Ireland has a great economy and will still be able to compete in many ways. For example, the rates will always be lower in Ireland than in France and in Germany, there is no doubt about it.

Ireland needs to take away these constructions. On our tour, we picked up on the countries that play this game. In my country and also here I see them as pirates. It is the Netherlands, Luxembourg, Malta and Ireland, unfortunately. We play the game of going into another country and stealing tax bases. This should come to an end in the sense that now the paper constructions should be ended. That is why Ireland could embrace the CCCTB.