Following a discussion at the G20 summit of Sunday 4 and Monday 5 September on the notion of 'tax certainty', the Slovak Presidency of the Council of the EU lost no time in including the point on the agenda of the informal meeting of the finance ministers, to be held in Bratislava on 9 and 10 September.
"Tax uncertainty directly affects internal investment as well as cross-border investment and trade, as the uncertainty means risks and drives up the cost of capital", the Presidency explains in a note drafted jointly with the OECD ahead of the Economic and Financial Affairs Council (Ecofin). Concerns over this tax uncertainty are on the increase for a number of reasons, such as the prevalence of digitisation and intangible assets, but also due to changes in the international rules to reduce double non-taxation, the Presidency and the OECD go on to explain.
The document explains that certain actions of the BEPS project of the OECD to fight tax optimisation have been implemented by the EU by means of legislative initiatives, whilst others will be set in place by means of more informal actions. For instance, the EU has already agreed on a directive that includes three BEPS actions, whilst two other actions will be implemented by means of amendments to the directive on administrative cooperation. As regards various other BEPS actions, the Commission has had to opt for recommendations, as it cannot legislate on the revision of the bilateral tax agreements of the member states, in particular. "In the absence of minimum standards for all BEPS actions, moreover, certain OECD recommendations could be implemented differently or not at all, by some of the EU's economic partners", the note of the Presidency and the OECD reads. The EU should promote a consistent approach and coordinated implementation at international level, the document goes on to state.
Within a fairly tense context in the wake of the Commission's decision to order Ireland to impose a tax adjustment of €13 billion on Apple due to a tax ruling that constituted illegal state aid, the Presidency takes the view that tax administrations themselves have a part to play, particularly as regards the implementation and interpretation of the rules. "This may concern in particular the way tax administrations handle tax rulings and advance pricing agreements", according to the document.
The Presidency also touches upon a possibility that would never have come to fruition in the climate that prevailed before the LuxLeaks and Panama Papers scandal: revealing the activities of promoters of aggressive tax planning schemes. The document considers the possibility of making amendments to the administrative cooperation directive to include 'obligatory disclosure' rules, in order to oblige the member states to include these on their national registers, on the basis of action 12 of the OECD. This would involve including a minimum standard to require the disclosure of any scheme aiming to circumvent the Common Reporting Standard for automatic exchange is financial account information. It could also apply to the schemes used in Panama Papers for offshore tax avoidance. This means that nothing would be set in place regarding the aggressive tax optimisation of multinationals. (Original version in French by Élodie Lamer)