The European Commission will be able to sound out the member states on the relaunch of its planned common consolidated corporate tax base (CCCTB) at the meeting of the EU finance ministers on Tuesday 8 November. Additionally, France has ultimately managed to avoid a discussion of its “patent box”, its tax credit scheme for competitiveness and employment (to promote research and innovation).
The discussion on the CCCTB will not go into detail but will set the tone at ministerial level, a source close to the delegations explained. Eventually, the CCCTB will get rid of intra-group transactions within the EU, due to the consolidation of the results of the group, which the mechanism will allow from 2021, all being well. At the Council, however, concerns have been raised at the fact that the tax optimisation possibilities related to transfer prices will be governed by the CCCTB only for transactions within the EU, and not for those with third countries. The Commission will also present its proposal for a tax dispute settlement mechanism for use between states and amendments to its recent anti-tax avoidance directive, to cover hybrid mismatch situations between a European country and a third country.
The ministers will then have the opportunity to hear from the Slovak Presidency of the Council of the EU on the revision of the directive to fight money laundering and the financing of terrorism, a year on from the attacks on Paris of 13 November 2015. The aim was to arrive at a general approach under the Slovak Presidency. The main issue, one diplomat explained, is striking a balance between security and privacy issues.
A brief discussion will then take place on the postponement of the entry into force of the “Priips regulation” (1286/14) on the pre-contractual information that retail investors may use to compare certain financial products. This postponement was made necessary by the European Parliament’s rejection, in September, of the proposed implementing measures of the regulation presented by the Commission, which aimed to detail the content and terms of the “KID” key information document on retail financial products (see EUROPE 11624). The discussion of this at the Ecofin Council is by request of Germany. “There will be real expectations of the finance ministers, because there are genuine concerns of the industry professionals on this”, a source told EUROPE. The year’s postponement seems reasonable, the source added.
This will be followed by a progress report on the implementation of Banking Union. According to the latest information available, Belgium was expected to have finished the work to transpose the BRRD directive (2104/59) on the recovery and resolution of banking groups. All that remains to be done is publication in the Belgian official gazette.
The ministers are also expected to adopt conclusions on the criteria and procedure to establish a list of non-cooperative jurisdictions in taxation matters. The situation was still unclear, however, following the meeting of permanent representatives (Coreper) on Friday evening even though the Slovak Presidency came with a brand new compromise proposal. The discussion would appear to have been difficult and the Presidency is believed to have promised to notify the member states as early as Monday morning on how it intends to proceed on Tuesday.
The EU wants to go further than the OECD by not using only criteria based on transparency but also including fair taxation (issue of tax rates of nearly 0%) and the implementation of the BEPS action plan of the OECD to fight the aggressive tax optimisation of multinationals. The gap between the European criteria and those of the OECD has given rise to a few debates, the source went on to say. Member states would like to establish a list of third countries, to be notified by post by January 2017, with which to begin dialogue with the hope of setting the list in stone in November or December of the same year.
A number of points remain controversial, as witnessed by two documents, one dated 31 October and the other 3 November. EUROPE will return to this.
On Tuesday morning, moreover, there will be a meeting with the countries of EFTA (Iceland, Liechtenstein, Switzerland and Norway). Against the specific backdrop of the wake of the British referendum on Brexit, these countries may ask to be involved or consulted in the process of the UK leaving the EU. Finally, Monday morning will see macro-economic dialogue with the social partners and the ECB, which is expected to focus on the economic situation and investments. (Original version in French by Élodie Lamer)