Brussels, 27/05/2015 (Agence Europe) - A non-controversial policy debate was held at the EU College of Commissioners on Wednesday 27 May on the action plan to be unveiled on 17 June to make corporate taxation in Europe fairer and to tackle hard-line tax evasion by multinationals.
As expected, the European Commission said it was examining the relaunch over the next few months of the common consolidated tax basis for company taxation (CCCTB) to make it compulsory rather than optional as at present and also to postpone the consolidation aspect until a later date. European Commission Vice-President Valdis Dombrovskis said the question of the legal form of this relaunch had not yet been decided upon, and it could take the form of amendments, or new draft legislation. The second option appears more likely because, legally speaking, the European Commission would have to withdraw the legislation already unveiled in this connection. The new rules could be known as a “mandatory common corporate tax base”.
Two European commissioners intervened in the debate to say that the work needed to take place in a shorter timeframe than the 18 months foreseen by the Commission but the Commission says that it takes time to prepare legislation, particularly since an impact assessment is needed to get the ball rolling since the CCCTB is currently blocked at the Council.
The ECR Group at the European Parliament made it clear from the outset that it will not be supporting CCCTB, even if it is revised and adjusted. Danish MEP Morten Messerschmidt said on behalf of his group that, if the EU wants to make itself even more unpopular and non-competitive at the same time, then tax harmonisation was the right road to follow. A single veto at the Council would be enough to stop the legislation in its tracks.
The Commission clarified that it had not discussed the minimum tax rate but rather the effective tax rate. A preparatory memo for the policy debate (see EUROPE 11320) highlights that the question of effective taxation arises in the European context in particular, because EU legislation prevents member states from taxing benefits attributed to a body established in another member state, even if corporate tax in that other member state is extremely low. This issue is generating obstacles at the Council on the interest and dividends directive since France, Germany and Italy want the matter to be discussed. The Commission is expected to indicate in June that it will be examining the question to allow greater flexibility to the member states to protect their tax bases and leave it to the member states to decide whether to introduction additional taxation in such cases.
On country-by-country reporting, “there wasn't any loud protest” from the commissioners, although some would prefer such reporting to be for tax offices alone. On 17 June, the Commission will announce a public consultation on whether companies should make country-by-country public disclosure. Dombrovskis told a handful of reporters that the Commission was very seriously examining this.
Finally, the Commission would like a more coordinated approach from the member states in dealing with non-cooperative non-EU countries. There would need to be intermediate stages, but a European list of non-cooperative jurisdictions could be drawn up. (Elodie Lamer)