Brussels, 17/12/2014 (Agence Europe) - The latest version of the European Commission's working programme for 2015, which was presented on Tuesday 16 December, aims to be more specific about what the institution has in mind to fight tax evasion and tax fraud.
A first draft, which was leaked last week, made reference to a communication aiming to stabilise the tax base in the EU and the resumption of work on a 'common consolidated corporate tax base' (CCCTB), in parallel to a proposal on the automatic exchange of information (AEI) on tax rulings. The official programme promises an action plan to fight tax fraud and tax evasion.
The S&D group at the EP hails this as a victory, having threatened to withdraw its support in the absence of concrete measures laid down in this programme in black and white. A Commission source stressed that this was already one of the priorities of President Juncker during his election campaign. The anticipation of these priorities has increased, due to the political context marked by the LuxLeaks scandal. The Commissioner for Taxation, Pierre Moscovici, also referred to a full roadmap to tackle the question of harmful tax competition, in a letter to three ministers.
According to the Commission, the action plan will take as its basis the work carried out by the OECD on fighting tax optimisation (the BEPS action plan), “in order to move to a system on the basis of which the country where profits are generated is also the country of taxation, including in the digital economy”. A further aim will be to relaunch the CCCTB, described by Moscovici as a response to the call by three ministers (of Italy, France and Germany) in favour of an anti-BEPS directive.
However, the CCCTB has been at deadlock at the Council since it was presented in 2011. A number of states, which are not necessarily against it, see it more as a medium-term project and are calling for short-term actions.
At the Commission, it was also pointed out that in their letter to Moscovici, the three ministers make no reference to the CCCTB. In the short term, as has just been done for the 'parent/subsidiary' directive, an anti-abuse clause in the 'interest in royalty' directive could be an option.
A further option, which has not been considered by the Commission, but has been put forward by a member state which is generally opposed to any form of harmonisation, would be to strip the CCCTB of all elements laid down in the OECD's BEPS project (international elements, general anti-abuse clause, switch-over clause, etc), to agree on that and leave the harmonisation plank for a later date. However, this decision is the remit of the Presidency of the Council.
The Commission also hopes to bring the CCCTB into line with current challenges. Amongst other things, Commissioner Moscovici referred to the possibility of making the CCCTB optional. This means that one of two things will happen: either the Commission will present a modified proposal, or it will agree internally on a position to defend at the Council, but the former solution would be preferable. The communication it plans to present is also expected to come fairly soon in 2015.
As regards the directive on the automatic exchange of information on tax rulings, although the decision has not yet been made, it will probably consist of an amendment to the directive on administrative cooperation. The Commission is currently focusing its efforts on the scope of application of this directive, trying to be as ambitious as possible on the type of information to be shared. The Netherlands, amongst others, has argued in favour of the broadest possible scope. Although the scope should be broad, the information shared, on the other hand, should be structured.
The Commission has also decided to withdraw its proposal on the taxation of energy, which is blocked at the Council. The directive on tax on savings also needs to be repealed, now that its proposals have been included in the directive on administrative cooperation.
Lastly, it is worth noting that on Wednesday 17 December, the EP announced that a legislative report was to be drawn up by two rapporteurs (EPP and S&D), entitled “Bringing transparency, coordination and convergence to corporate tax policies in the Union”. Work will also be carried out on an investigative report by one MEP from the ALDE group and one from the ECR. (EL)