Brussels, 10/10/2014 (Agence Europe) - The ECOFIN Council meeting in Luxembourg on Tuesday 14 October will tackle a raft of tax questions. The Italian Presidency of the Council of the EU hopes agreement will be reached on the changes to the EU directive on administrative cooperation. The EU will sign a common statement with Switzerland on company taxation, and ECOFIN will discuss low investment in Europe and bank contributions to the single resolution fund.
AEI. Ministers will discuss the introduction of an automatic exchange of information (AEI) rule around the world, drawn up by the OECD. They hope to reach agreement on the changes to the EU directive on administrative cooperation. Twenty-six of the 28 EU member states say they will be able to apply AEI from 2017 onwards. Austria and Luxembourg are calling for an extra year's leeway for technical reasons. Both countries are reported to have rejected the technical assistance offered by Germany. Switzerland has announced that it will introduce AEI in 2018. By way of compromise, the OECD's AEI might be applied in 2017 and the EU savings tax directive that includes a more limited AEI be suspended. A Presidency source says that at worse, there would be an agreement that would give the two countries an extra year, but there might be a positive surprise.
BEPS. Over breakfast, the ministers will discuss the OECD's BEPS (base erosion profit shifting) rules. France is reported to be planning to argue that rather than waiting for the OECD, a taskforce should be set up that would act faster and then help the OECD in its work. Tax erosion is multi-faceted and can take the form of state aid, as shown in recent investigations into tax rulings by Luxembourg, Ireland and the Netherlands for multinationals such as Fiat Finance and Trade, Amazon, Apple and Starbucks. At EU level, such matters are covered by a number of departments, the Directorate General for Taxation, the DG for Competition and the DG Internal Market, and an Italian Presidency source laments the lack of overview and says greater integration is required on tax issues. The Italian Presidency says the question should be linked to the common consolidated tax basis for companies, which has been on the negotiating table for years now. The source says faster progress is required.
Energy tax. The EU finance ministers will discuss the state of play for the energy tax directive after more than three years of technical work. The directive aims to harmonise duty on fossil fuels and other fuels. An EU source says that the last compromise was not very ambitious and a number of member states are perfectly happy with the stalemate. Some countries object that the draft directive would damage industry competitiveness, other says that it penalises them because of their energy mix. An Italian Presidency source says that some countries are calling for further technical work. The Presidency source says that 29 technical meetings have been held so far so it is something else that is preventing the EU from reaching agreement. Some countries want to be more proactive and France, for example, will arrive at the meeting in Luxembourg with plans to make it clear that the legislation must get through.
At a meeting with EFTA states (Iceland, Liechtenstein, Norway and Switzerland) on Tuesday morning, the EU will sign a joint statement with Switzerland on company taxation. Following work by the Code of Conduct group, the EU and Switzerland recently signed a deal under which Switzerland has promised to scrap five schemes the EU says are damaging.
Measures to foster investment. The ECOFIN Council will publish a conclusions document on measures to be taken to foster investment, which will point out that improving the conditions for public and private investment lies at the heart of the EU's action to promote growth. The European Investment Bank and the European Commission will brief ministers on the first meeting of the taskforce set up on this issue at the EIB to identify obstacles to growth and identify projects that can be carried out in the short to medium term. France and Germany say that the EIB should take greater risks, but the EIB refuses to do anything that might jeopardise its triple-A credit rating.
Bank contributions of the single resolution fund (SRF). The European Commission will brief the ministers on preparations for legislation to determine how much banks shall contribute to the SRF. Two delegated acts on bank contributions are now expected to be ready for the end of October (rather than the end of September). Bank contributions will be calculated on the basis of their liabilities, excluding own funds and covered deposits, and adjusted for risk. French bank contributions may make up 20% of all bank contributions, which are expected to rise to €55 billion after the first eight years.
Finally, the Commission will present details of implementation of the 2014 budget. The Commission recently raised the alarm over the worrying situation regarding payment appropriations. (EL)