Brussels, 27/10/2015 (Agence Europe) - On Tuesday 27 October, there was no longer any mystery surrounding the opinion of the EP on the agreement reached in early October at the European Council on the automatic exchange of information on tax rulings. It was by a considerable majority (572 votes in favour, 90 against and 30 abstentions) that the plenary session of the EP adopted the report by Markus Ferber (EPP, Germany), which is more ambitious than the approach decided on by the Council and, on certain points, than the Commission's initial proposal as well.
The message sent out by the MEPs is clear. The Council has watered down the Commission's proposal on each of its key aspects: the scope of application, retroactivity and the role of the Commission (see EUROPE 11404). The UK MEP Molly Scott Cato (Greens/EFA) criticised the fact that the Council did not even wait for the EP's opinion before reaching its agreement. Markus Ferber said that the Council was “conspicuous by its absence” from the plenary debate.
It was the down to just the European Commissioner for Taxation, Pierre Moscovici, to defend the text on which the state hammered out a compromise. On the scope of application, whilst the MEPs wanted exchanges on all rulings, the Commissioner pointed out that he himself had proposed only the exchange of cross-border rulings. “Extending it to domestic decisions would have the effect of considerably increasing the administrative burden, and would prevent the tax authorities from focusing their attention on the main issues”, the Commissioner explained on Monday evening, during the debate. He went on to say that using the single market legal basis, the question as to whether other rulings than just cross-border ones could be covered had been raised. You should “not see this as the end of the story”; in a “subsequent phase, we may decide to go further”, he added. He appeared firmly to believe that transparency would have the effect of getting rid of bad rulings. And the “fight for transparency” will not stop there, he promised. Explaining that he had received carte blanche from the President of the Commission, Jean-Claude Juncker, to move forward within the framework of his portfolio, Moscovici raised the issue of country-by-country public reporting, which would oblige major groups to disclose certain accounting information (turnover, tax paid, etc). The EP is firmly in favour of this and has included it in its negotiating position on the 'shareholders' rights' directive, for which the first round of inter-institutional negotiations began this Tuesday.
The Luxembourg Presidency of the Council believes that it is too early to tackle the substance of this issue, until the Commission has published its impact assessment, and therefore wishes to start with other points of the directive. “I call on the EP for a bit more patience and a bit more confidence” when it comes to the reporting, said Moscovici. The impact assessment is not a way to “dodge this issue, but to see under what conditions reporting could reconcile transparency and economic efficiency, I have expressed a very clear political preference”, he continued. Either the EU will follow the OECD (reporting to the administrations, then exchange between these), “or we will go further, as long as this does not penalise businesses”. However, the OECD has advised the EU against going further than its model (see EUROPE 11418).
The EU also adopted the Kofoed report on the agreement between the EU and Switzerland on the exchange of information on bank accounts and that of Molly Scott Cato on the cancellation of the 'tax on savings' directive. This directive is to be cancelled as its provisions on the exchange of information were extended in the framework of the revision of the directive on administrative cooperation, which was adopted just a few months after the Council's agreement on tax on savings. Pierre Moscovici stressed the fact that this directive was no sooner adopted than “obsolete”. “This needs to be a lesson for us, we need to work more quickly”, he concluded. (Original version in French by Elodie Lamer)