Brussels, 19/11/2014 (Agence Europe) - The European Commission has no plans for its proposed automatic exchange of information (AEI) on tax rulings to disappear into thin air.
When asked about the fact that this proposal could get stuck at the Council, where decisions on taxation matters require unanimity, the vice-president of the European Commission, Frans Timmermans, took pains to strike a reassuring note. “I am not sure that it will not be possible to reach an agreement with the Council”, he said on Wednesday 19 November, when informing the press about the results of the meeting of the college of commissioners. Timmermans went on to explain that the feeling which is “shared and accepted by most of the member states” was that this is “an urgent issue”.
The commissioner for taxation, Pierre Moscovici, provided some clarifications on the timetable for the presentation of the proposal in question. “We will work quickly and decisively, from the start of 2015”, he told French daily newspaper Les Echos in an interview published the same day (our translation).
Although Ireland could be showing signs of coolness, Luxembourg, in the person of its finance minister, indicated before the start of the work on this proposal had even been announced that he would be open to an automatic exchange of information of this kind extended to rulings. “Step by step, we have brought in an automatic exchange of information at European level, so why not extend this system of exchange of information to rulings or other issues?”, he said, when the Luxleaks scandal broke (see EUROPE 11192). However, he stated that this was a subject that needed discussing and that this discussion should be held at global level “so that this is not just a European initiative”.
Luxembourg's prime minister, Xavier Bettel, spoke along the same lines on Wednesday 19 November, in the columns of Belgian daily newspaper L'Echo. “I feel that the European Union would be a first step, which could exist, but I believe that the OECD is the most appropriate framework”, he said (our translation).
The self-same OECD has already given its attention to the matter, in its proposal, as part of its BEPS initiative, for an obligatory automatic exchange of information on the tax rulings. BEPS is its 15 point action plan to fight tax optimisation and the erosion of tax bases. The commitments made by the G20 last Saturday on this point, which the Commission felt did not go far enough, should be seen in the light of BEPS, an OECD source explained.
As for the other major tax initiative of the Juncker Commission, giving a new shot in the arm to the common consolidated corporate tax base and revising it in light of current challenges, Luxembourg drew its lines in the sand. “Stating that everybody within the EU must move towards single taxation and the same taxation rates, I am against that. This is a competence which is a matter for the member states”, said Bettel.
At the most recent meeting of the Ecofin Council, Moscovici referred to harmonisation “on the tax base for the time being”. He has already explained that if necessary, he could propose “reinforced cooperation between the states, along the lines of the financial transactions tax”. The EU rules require the use of reinforced cooperation to be a last resort. A Commission source explained that it will first be necessary to exhaust all possibilities of moving forward with the EU as a whole. (EL)