Brussels, 16/09/2015 (Agence Europe) - Polish MEP Danuta Hübner (EPP) is planning to take advantage of a hearing on Thursday 17 September at the European Parliament's special tax committee of the president of the European Commission, Jean-Claude Juncker, and Taxation Commissioner Pierre Moscovici to raise concerns about their plans to tackle corporate tax evasion.
Hübner is the EPP's negotiator on the report to be drawn up by the special committee and she is concerned about how the proposal to introduce a common consolidated corporate tax base (CCCTB) will be dealt with.
In the light of the talks blocked at the Council of Ministers for years now on CCCTB, the Commission is planning to return to the question next year with amended draft legislation that will postpone the consolidation aspects. “I am not sure we gained immediate and new supporters at the Council but if we want to obtain consensus we have to act slightly differently,” said Moscovici after the Ecofin Council.
Danuta Hübner told a handful of reporters on Wednesday that only having a CCTB (without the consolidation side) would leave wriggle room for the transfer of profits for tax avoidance ends. She explained that a non-consolidated common tax base would also prove costly to businesses. NGOs and lobby group BusinessEurope are also calling for the consolidation aspect to be kept. If nothing else can be gained, Hübner says that bridging between the two phases should be as detailed as possible.
Some countries are taking the long view on CCCTB and recommend other action in the short-term to tackle corporate tax evasion. France wants a special clause on minimum 'effective taxation' to be included in the interest and compensation directive, and for this clause to also be added to the parent company-subsidiary directive. Commissioner Moscovici warned that the discussions would take time (see EUROPE 11387). Hübner is not really in favour of a minimum effective tax rate, which she doesn't feel is feasible.
Tax rulings. Asked about another set of talks, on the automatic exchange of information on tax rulings, Hübner called for the Commission to be at the heart of the information exchange process. With this information, the Commission should be able to detect irregularities and launch investigations, if required, into potential state aid, she said. This is exactly what member states are worried about. At the Council meeting in June, Ireland, Spain, Malta, Sweden, the United Kingdom, Slovakia and the Netherlands asked in public what the role of the European Commission should be in the information exchange, some of them calling of the Commission to only be given statistics to enable to verify that information has indeed been exchanged (see EUROPE 11339). Poland is one of the countries dragging its feet on the submission of information about tax rulings to the Commission's competition department (see EUROPE 11308). Hübner said that countries also seemed to fear that the Commission would give this information to the EP. Summing up, the MEP said she was in favour of either the introduction of an independent institution to centralise the exchanged tax ruling information (despite the cost) or for the shared information to be anonymous.
More generally, Hübner called for guidelines from the Commission on the design of tax rulings. In amendments to the draft tax commute report, she will recommend that tax systems are made clearer in order to reduce the need to exchange information in the first place. Most stakeholders point out that rulings provide legal security to companies about how their tax will be processed by the tax office. Harmonising the system, without adjusting the rates, could also remove the need for such legal clarifications.
The MEP also raised the question of the protection of whistle-blowers, which she feels will require a two-stage approach. Whistleblowers who initially approach the authorities to denounce illegal practices and who do not gain any response would be protected if they agree to later make the information public. The draft tax committee report urges the Commission to unveil a whistleblower protection initiative.
Amendments to the draft report have to be lodged by 23 September so the committee can vote on 15 October. The vote in plenary will follow in November, at which point the special tax committee will cease to exist. But although the EP is consulted on tax issues, Hübner sees a new political role emerging for MEPs, who should, she said, monitor tax questions perhaps by setting up a new tax force at the EP.
Transparency International wants a public commitment from Juncker on tax reporting. NGO Transparency International demanded the same day that Jean-Claude Juncker “unequivocally endorse this principle in front of citizens' representatives” (referring to public country-by-country reporting. The public consultation on the matter ended on 9 September. The EP endorsed country-by-country public tax reporting in its negotiating position for the interinstitutional talks on the shareholders' rights directive. (Elodie Lamer)