Paris, 11/12/2015 (Agence Europe) - How fast should the EU implement the OECD's BEPS action plan (erosion of the tax base and transfer of profits) compared with the rest of the world, wondered Luxembourg's finance minister, Pierre Gramegna, on Friday 11 December at an event at the OECD's headquarters in Paris.
Speaking on behalf of the Luxembourg Presidency of the Council of the EU, Gramegna said the EU could be a precursor, as for the exchange of information about tax rulings, but it must now walk alone and a level playing field was required.
During Luxembourg's presidency of the Council of the EU, he said progress had been made in reflection on how BEPS should be implemented in the EU, aware that the question was raised of whether it should be implemented EU-wide or measure-by-measure in each individual country. He said the answer was not simple and everything that can be done together should be done together, but there are things that cannot be done together.
Pascal Saint-Amans, director of the OECD's tax policy and administration centre, admitted that G20 countries that have committed to BEPS are not obliged to actually implement it, but experience of the global standard for the exchange of information is reassuring because its commitments have actually been followed through, he said, adding that there was a moral commitment and countries take a serious attitude, particularly when commitments are made by heads of state. He explained that it would make the OECD's life easier if the EU transposed BEPS in an EU directive.
The European Commission is planning to do just that, with a draft anti-BEPS directive expected to be unveiled on 27 January 2016. Taxation Commissioner Pierre Moscovici said he wanted a single approach or at least a common approach to BEPS and for no country to abstain from any aspect of it.
One of the BEPS actions that perfectly illustrates some countries' desire to bring the rest of the world along in their wake is country-by-country reporting, which the OECD says commits big companies to provide the tax authorities with accounting material such as turnover, profits and taxes paid… The EU is currently considering whether to go much further than the OECD by making this reporting public. A proposal may be unveiled in March to this effect. The OECD has already warned the EU of the problems that could be raised by transparency on reporting issues (see EUROPE 11403).
Some countries where big multinational have their headquarters have doubts about this, said Pascal Saint-Amans. He explained earlier in the year at the European Parliament that the United States, Japan and other countries had made it a condition that agreement on reporting must be for the information to be provided to tax offices, rather than the public domain (see EUROPE 11286). In the OECD talks on BEPS, said Saint-Amans, there wasn't consensus about publicity itself, but rather on opposition to publicity. Pierre Moscovici said the EU works well with the OECD, but has the right to have debates. He said that some countries have already started implementing BEPS. France, for example, has included BEPS reporting in its finance law, but the French national assembly amended the legislation to demand that the government go further. The Commissioner said that waves of disappointment would be created if more wasn't done, but he said he would refrain from issuing proposals that could be 'penalising.' The Commission is looking into whether public reporting could damage competitiveness for European companies. Alongside this argument, Luxembourg's finance minister said that there were other issues at play, such as business and professional confidentiality.
Pierre Moscovici said it was a choice for society, to which Pierre Gramegna responded that Luxembourg could live with public reporting, because it already had it for banks, but the question was how far transparency should go and it would be unhealthy to publish tax rulings, for example.
MEP Alain Lamassoure (EPP, France), chair of the EP's special committee on tax rulings (TAXE), who was attending the Paris conference as an auditor, suggested forcing multinationals to apply the OECD's reporting with the option of publishing the reported information if they desired. He betted that a number would start publishing it and the others would follow because when one begins with transparency, everyone is forced to follow suit, even if they aren't very happy about it. Pierre Gramegna said that was a good idea.
More generally, Pierre Moscovici warned that tax evasion went further and companies would always find new ways of wriggling out of tax. He said one mustn't be naive and work had to continue. (Original version in French by Elodie Lamer)