Brussels, 10/12/2014 (Agence Europe) - The battle for fairer taxation was added to the priorities of the president of the new European Commission, Jean-Claude Juncker, well before the LuxLeaks scandal broke out, explained the European Commission on Wednesday 10 December following new leaks to forty-odd newspapers. The Commission was hit by the first LuxLeaks revelations after being in office for only four days. On Wednesday, it simply repeated what it said a month ago.
On Tuesday evening, further tax rulings in Luxembourg were revealed in more than forty newspapers, including Le Monde, Le Soir and Irish Times. The tax rulings in question cover, among others, Skype, Walt Disney and Koch.
Commission spokeswoman Vanessa Mock said that corporate tax avoidance was a direct result of the lack of tax harmonisation in the EU and the Commission's response was greater harmonisation and coordination to clamp down on tax avoidance and aggressive tax planning. She mentioned the draft legislation to be unveiled by the Commission in the first quarter of next year on the automatic exchange of information on tax rulings (probably in the form of a review of the directive on administrative cooperation) and the idea of breathing new life into the common consolidated corporate tax base (CCCTB), which has been in deadlock at the Council level for a few years. Quizzed about the deadlock, Mock said: “We do see that the mood has changed and that's why the European Commission will capitalise on it to push this agenda forwards too.” Speaking from Luxembourg, where the new Commission was being signed in, Jean-Claude Juncker said that tax harmonisation was an “absolute necessity.”
Behind closed doors on Tuesday, the Ecofin Council held a brief debate about the letter to Commissioner Moscovici from the German, French and Italian finance ministers, urging it to unveil an anti-BEPs action plan (to tackle corporate tax evasion) by the end of this year. Denmark and Spain are reported to have said that they backed the request. Luxembourg promised to support the Commission's initiatives. The Council of Ministers points out that in his reply, Moscovici did not commit himself. The Netherlands are reported to have called for transparency, but against any other form of tax harmonisation.
On Wednesday morning, Luxembourg reacted to the second round of LuxLeaks revelations. The finance ministry explained: “Rulings issued by the Luxembourg tax authority are neither contracts nor mutual agreements. They are unilateral decisions by the tax authority. They are not, and never have been, secret. In fact, Luxembourg, upon request, exchanges information on rulings with other countries, as foreseen by non-double taxation treaties as well as by directives and agreements concerning administrative cooperation and mutual assistance in tax matters.”
S&D wants clear action in return for its support. At a press conference on Wednesday afternoon, the head of the socialists at the EP, Gianni Pittella, called for tangible measures in the European Commission's work programme that is to be unveiled in Strasbourg next week. Pittella said that the Commission's action would determine the S&D's confidence, but this was not to be viewed as a threat.
The S&D has sent a letter to Jean-Claude Juncker to this effect, expressing a number of demands. Elisa Ferreira of Portugal called for a central public registry of companies and trust companies.
Eva Kaili demanded transparency and a mandatory corporate tax basis, along with a financial transactions tax, conclusion of the talks on revision of tax agreements with non-EU countries and a European black list of tax havens. She said strong penalties were needed for banks that make fraud possible.
The head of the ALDE group, Guy Verhofstadt, promised to urge his colleagues at the EP Conference of Presidents on Thursday to fast-track the EP's inquiry and legislative reports. The Greens/EFA said the new leaks were an opportunity to call for further signatures in order to set up a genuine investigative committee. So far, the Greens/EFA have garnered some 140 signatures, but they need a minimum of 180. Some socialists are on the point of signing, suggests the group.
For drawing up the reports already agreed upon, ALDE and the Greens/EFA will have control over the inquiry report, and the S&D and EPP over the legislative report. (EL)