Seven national parliaments from six member states have sent reasoned opinions to the European Commission outlining the reasons they feel that the planned common consolidated corporate tax base ('CCCTB') breaches the principle of subsidiarity. This is not enough to trigger the subsidiarity control mechanism (known as the 'yellow card' procedure).
The parliaments of Denmark, Ireland, Luxembourg, Malta, Sweden and both houses of the Dutch Parliament submitted reasoned opinions to the Commission on this issue by the deadline laid down (Monday 2 January).
"We have received seven reasoned opinions from parliaments, representing 12 votes out of 56", a Commission source confirmed. This was therefore not enough to trigger a 'yellow card' procedure. To do this, 19 votes were required, as it is a taxation matter. If this threshold had been reached, the Commission would have been obliged to re-examine its draft, making a decision to keep it unchanged, modify it or withdraw it altogether.
The Commission takes the view that the CCCTB is entirely compatible with the principle of subsidiarity. Its aim is to remove obstacles to the single market for businesses, which cannot be done at national level, the same source explained.
Receiving reasoned opinions does not mean that there will be problems in reaching an agreement on the legislation at the Council, the source went on to state. Reasoned opinions represent the opinions of the national parliaments and do not necessarily reflect those of the government.
As it is a taxation matter, however, unanimity is required and a number of governments continue to have misgivings about tax harmonisation. At the Council, some of them take the view that partial harmonisation could be possible (on tax breaks, for instance).
However, despite the insistence of the Commission, the member states failed to agree on a dated roadmap to achieve certain milestones of the CCCTB, in December of last year.
Amongst other taxation work still to be completed, the Maltese Presidency of the Council will have to reach a compromise on reopening the anti-tax avoidance directive (ATAD). In November, the Commission presented a proposal aiming to respond to hybrid mismatch situations between a member state and a third country. In December, the Ecofin Council failed to reach an agreement, as concerns persisted as to various exemptions for the financial sector and a number of parliamentary reservations were still in place on the date on which the text was to be implemented (see EUROPE 11683).
As regards the exemptions for the financial sector requested by the United Kingdom, a number of member states opposed these. This was the case with Slovenia, Austria, France, the Netherlands and Greece in particular. The same also applied to Italy, although it said that it was prepared to get behind the compromise. Luxembourg expressed the view that the current wording of some of these exemptions mean that they could have an impact on the prudential rules for the financial sector. Lastly, the Netherlands wants a derogation so that it does not have to implement the rules until 2024 (rather than 2019).
At the end of October, the Commission also presented a directive aiming to create a solid mechanism for the resolution of tax disputes resulting from double taxation affecting companies from different member states. At this moment in time, the EU has only an arbitration agreement, which is ineffective and the procedures can take a long time (up to ten years). This proposal has not yet been discussed at ministerial level.
Lastly, ten countries are still trying to agree on the outlines of a financial transactions tax (FTT). A further ministerial meeting is slated for January. (Original version in French by Élodie Lamer)