Brussels, 11/02/2014 (Agence Europe) - Tax and competition policies, particularly state aid rules, should work together to ensure an even playing field for companies in the single market. Tackling tax evasion by multinationals goes hand in hand with removing or adjusting member state rules that provide unfair local advantages or subsidies, often to the advantage of these same multinationals and to the detriment of other companies and consumers. This was the message of the third European Competition Forum organised by the European Commission in Brussels on Tuesday 11 February.
EU Competition Commissioner Joaquin Almunia emphasised this message, saying he wanted to use state aid investigations to deal with local rules that provide selective tax advantages that are inefficient economically because they break fair play rules for the division of capital within the single market. For the area of taxation, where member states have sovereign powers and where taxation rates vary widely, EU Taxation Commissioner Algirdas Semeta explained that the Commission's role is to ensure fair fiscal competition in order to preserve the integrity of the single market and deal with legislative loopholes that enable companies to minimise or wriggle out of taxation. The tools to this end, he said, include the EU VAT and customs and excise rules, initiatives like the common tax base for company taxation that provides the double advantage of simplifying red tape and reducing creative accounting options whereby companies shift profits among subsidiaries in different countries to reduce the amount of tax they have to pay. There is also a code of conduct on company taxation, in which member states pledge to remove tax systems that amount to unfair competition in the fiscal field.
The commissioner spoke about what is current taking place to introduce in the EU the G20 and OECD recommendations on extending the automatic exchange of tax information and on tackling erosion of the tax base and the transfer of profits. On behalf of the OECD, Angel Gurria welcomed the work in progress, taking stock of what has been achieved at international level. He stressed the need not to discourage business by high tax levels and excessively complicated legislation. He said it would be better for tax, possibly at a lower rate, to be paid by all players, independently of their size and lobbying powers, by making tax avoidance difficult. MEP Philippe Lamberts (Greens/EFA, Belgium) criticised the hypocritical way some countries say they want to stamp out tax evasion while at the same time the same countries' behaviour and rules defend their own interests and the interests of big international firms. (FG/transl.fl)