On January 19, the European Parliament agreed that money that a member state should recover from a company due to infringements of tax-related state aid rules should be returned either to the EU budget or to member states that have suffered an erosion of their tax bases.
A new proposed legislation that asks the EU Commission to modify current rules so that amounts recovered do not go to the member state which granted the illegal tax-related state aid, was prepared by German MEP Werner Langen (EPP, DE). He said in a statement that "countries that play unfair tricks must not profit twice".
New legislation is part of the report, which was passed 500 votes to 137, with 73 abstentions. The report sets out general recommendations to improve competition and picks some bones with it on corporate taxation practices and state support to banks in the wake of the financial crisis.
The press release of the European Parliament states that MEPs would like the Commission to define new criteria for assessing market size in the digital area. They feel that the current overall “turnover” criterion is not sufficient to judge whether mergers or takeovers are leading to too-dominant market positions in the digital economy.
The press release further states that MEPs consider that the existing rules on fines to be imposed on legal persons for infringements should be supplemented by penalties against the natural persons responsible. Such fines should be high enough to act as a deterrent, they say. For more information, see the press release.
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