The Estonian presidency work programme and transparency rules for tax intermediaries are also on the agenda. Ministers are expected to adopt country-specific recommendations on the member states' economic, employment and fiscal policies, thereby concluding the 2017 'European Semester' cycle.
Tax intermediaries
The Commission will present, under 'other business', a proposal on transparency rules for tax intermediaries such as tax advisors, accountants, banks and lawyers that design and promote tax planning schemes.
Member states find it increasingly difficult to protect their tax bases from erosion, as tax planning structures become ever more sophisticated. Media revelations such as the April 2016 'Panama Papers' have exposed how some intermediaries actively assist companies and individuals to escape taxation, often through complex cross-border schemes. The proposal is aimed at preventing such planning by increased scrutiny of their activities.
Under the directive, certain types of cross-border tax planning schemes would have to be reported to the tax authorities before being used. The proposal identifies 'hallmarks' to indicate which types of schemes would have to be reported. The requirement to report a scheme would not imply that it is harmful, only that it merits scrutiny.
Member states would be required to automatically exchange the information they receive through a centralised database. This would enable an early warning on new risks of tax avoidance and for measures to be taken to block harmful arrangements. Member states would be obliged to impose penalties on those companies that do not comply with the transparency measures, thereby creating a deterrent.
Under the proposal, the reporting requirements would enter into force on 1 January 2019. Member states would be obliged to exchange information every three months thereafter.
To adopt the directive the Council needs unanimity, after consulting the European Parliament.
Country-specific recommendations
The Council is due to adopt, without discussion, recommendations to 27 member states on their
economic, employment and fiscal policies.
The draft recommendations assess the economic and employment policies set out in the member states' ‘national reform programmes'. They include draft opinions on the fiscal policies set out in their ‘stability' and ‘convergence' programmes.
Adoption of the texts will conclude the 2017 ‘European Semester' policy monitoring process, following endorsement by the European Council on 23 June. The Council approved the economic and fiscal parts on 16 June. The employment policy parts were approved by the Employment, Social Policy, Health and Consumer Affairs Council on 15 June.
The European Semester is an annual process for the simultaneous monitoring of the member states' economic, employment and fiscal policies.
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