Moscovici on the transparency revolution: Is taxation a poisoned chalice? That is what many told me when I found out – just a year ago – that President Juncker had also given me the taxation portfolio. Numerous Commission proposals languish on the table before Member States, the unanimity rule can lead to crippling paralysis, unlikely and unholy pacts are made to protect various special interests.
This hasn't held me back, however: when political necessity is at stake, even unanimity can be overcome.
There are three political factors in play today which allow us to move forward, despite unanimity. First, there is political space to create a European fiscal area which would allow companies to enjoy common rules in a unified internal market, instead of struggling with 28 different sets of rules. Second, there is political will to secure stable tax revenues for Member States, given the public deficit and debt situation. Finally, there is public pressure to ensure genuinely fair taxation and to put an end to tax fraud and evasion. The combination of all of these factors provides us with a unique opportunity. We have to seize it! We have to start a revolution of transparency, but also of one of efficiency, competitiveness, justice – just as Europeans expect. This is the challenge that I have signed up to and we are now poised to win on several key proposals. At the European Parliament hearing, which I attended today with President Juncker, we gave a clear signal that this Commission is determined to ensure that our tax projects succeed.
Determination pays off. We are on the verge of agreement on many our projects, including the Financial Transaction Tax, which has been under discussion for more than 5 years. Other files, which have been stuck in Council for years, have now been re-launched – such as the CCCTB, the Common Consolidated Corporate Tax Base. Even our brand new initiatives are already delivering first results.
Cautiously, brick by brick, we are building a fiscally responsible Europe. I want to find the right balance between the absolute necessity to provide companies in the internal market with clear tax rules, and the imperative to fight against harmful practices by a small number of them. The strong support of the European Parliament this morning confirmed this approach.
Here is an overview of the concrete steps we have taken.
We are close to the finishing line on the automatic exchange of information on tax rulings and the FTT:
On tax rulings, an agreement in Council – that is to say, amongst Member States' governments – is within reach for early October. Tax rulings are confirmations that the tax authorities give to a taxpayer on how his tax will be calculated. This, in itself, is neither illegal nor problematic. But if misused, tax rulings can facilitate or even encourage aggressive tax planning, resulting in a serious loss of revenue for Member States. Hence the importance of moving forward quickly on this file, given how hard hit public budgets are already, due to the recent economic crisis. The proposal I presented mid-March is close to agreement. I very much welcome that.
The FTT, a long-running saga since 2010, took a decisive step forward last week. Discussions amongst the 11 Member States that have chosen to cooperate on this project have finally resulted in a body of common principles. How the tax will be governed, its philosophy and its purpose are now commonly understood. Now, we are in a phase of technical work to finalize things. There remain some significant details to work out, such as the rate. But I sincerely hope that we will reach an agreement before the end of the year: I have been defending this tax from the beginning, I was one of its initiators, and I worked hard to facilitate the negotiations between Member States.
I also restored political impetus in three projects, with the full support of the European Parliament:
The European Parliament gave its support to the re-launch of the CCCTB proposal. The idea of ​​the CCCTB is simple: a company should only have to comply with a single regime within the EU to calculate its taxable income, rather than with the various different regimes in each Member State where it is active. The administrative savings for these companies would be around € 1bn a year. This proposal has been stuck in the Council for years.
I wanted to unblock the CCCTB, by offering a phased approach that will allow many of its benefits to be quickly felt. The draft we are preparing proposes a mandatory CCCTB to better prevent profit shifting – a voluntary system would be unlikely to stop companies engaged in aggressive tax planning. Our first priority is to pin down the common tax base, and once this is implemented, we'll progress with consolidation. The new proposal we are preparing will take on board parliamentarians' requests, for example with better provision for research and development. We need to build up Member States' appetite for the CCCTB again, with the support of the European parliament.
In addition, I raised the issue of effective taxation with Member States, at the informal meeting of EU Finance Ministers in Luxembourg last weekend. The principle of effective taxation is simple: any profit generated in Europe should be taxed in Europe. However, this is not the case today, because some companies use aggressive strategies and exploit Member States' disparate rules to circumvent tax. We have to put an end to this. The question is: how? We agreed to that our immediate focus must be on agreeing anti-abuse rules in the Interest and Royalty Directive, while stressing that this should not be misunderstood as any move towards minimum taxation.
Finally I had the opportunity to tell the Members of the European Parliament today about my very clear personal preference for public country by country reporting. Country by country reporting would require European multinationals to publicly disclose their profits and the taxes they pay in each country where they operate. Many see it as a good way to fight against corruption and against tax evasion. I am convinced that there is no contradiction between transparency and competitiveness. At the same time, I understand the caution about the potential impact for businesses. The European Commission has just finished a public consultation on this subject. We also intend to complete an impact assessment in the coming months. My political position on country by country reporting is crystal clear, but if the study reveals that it could have a negative economic impact, I will obviously take this into account.
Finally, I want to mention our work in relation to non-cooperative jurisdictions, where there is already visible progress. In June, the European Commission published a consolidated list of third countries listed by Member States for tax purposes. Not only has this list launched a debate; it has also encouraged better behaviour by listed jurisdictions. Many of these jurisdictions are now in closer contact with the Member States that listed them, to discuss the steps they must take to be de-listed. This list is not static: it will be updated soon. And it is for me a first step towards not only a consolidated but a common EU approach to listing, with shared criteria and even sanctions.
Things are definitely moving: that is exactly what I wanted.
Pierre Moscovici

Bron: Pierre Moscovici

Informatiesoort: Nieuws

Rubriek: Europees belastingrecht

H&I: Previews


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