On Tuesday 14 March, the European Commissioner for the Budget and Human Resources, Germany's Günther Oettinger, opened the door to the idea launched by his countryman Sven Giegold (MEP and member of the Greens/EFA), of using article 116 for taxation issues.
Taxation matters are decided unanimously by the member states and the European Parliament is simply consulted. Article 116 of the TFEU provides for the ordinary legislative procedure to be used in the event that the Commission notes that a disparity between the legislative, regulatory or administrative provisions of the member states is distorting competition conditions on the single market. However, the article in the Treaty states that the Commission must first enter into consultation with the member states concerned and that directives may be decided upon by the Council and the Parliament only if this consultation does not need an agreement to set the distortion aside. Article 116 could be the “ultimate tool for us to use, I am not ruling it out”, Oettinger told a plenary session debate on Tuesday evening. If the competition rules were breached, “we could trigger the article and fairly quickly too”, he added.
The idea was thus planted by Giegold, who had some extremely harsh criticism for the work of the Council. The member states “only know reverse gear” when it comes to legislative texts, he said. The chair of the committee of investigation into the 'Panama Papers' scandal, Werner Langen of Germany, observed that tax justice is nowhere to be seen in the programme Maltese Presidency of the Council of the EU.
At the plenary debate, however, it was mainly the 'Corporate taxation code of conduct' group that came under fire. Set up in 1997, this informal body of the member states works on the basis of 'peer pressure'. Under criticism for years due to its lack of transparency, a number of initiatives were taken last year to make it more efficient and less opaque, for instance by publishing its six-monthly reports.
But the group could do better. Langen explained that large parts of the working documents sent to him by the member states had been obscured.
Anneliese Dodds (S&D, UK) said that she had heard from an attendee of the meetings of the Council that it was impressive to “see the states publicly making themselves out to be ardent defenders of tax transparency”, then adopting an “entirely different position at the code of conduct group or at the Council”.
The code of conduct group is probably the very worst thing about Europe, said Paul Tang (S&D, Netherlands), draughtsman of the opinion on the common consolidated corporate tax base project. It has led to “very poor results and its level of legitimacy is at rock bottom", he added.
“The results (of the reform of the group) are mixed. The Commission pushed very hard for ambitious reform to make the group more relevant, transparent and accountable. Progress has been made, there is more regular and more transparent reporting (…). Work has also started on the content of the code and its criteria, but there I have to admit that the scope and pace have not been as fast as I would like", the Commissioner for Taxation, Pierre Moscovici, explained at the start of the debate.
The former chair of special TAXE committee, Alain Lamassoure (EPP, France), called for the group to be redefined, meeting at political level in the future, to “allow the ministers to show that they see tax justice as a priority which goes beyond the horizon of their head of bureau”. French Socialist Pervenche Bérès also called for the states to make the code of conduct group into more than just a tool that they can use as an “alibi”.
At the end of the debate, the Maltese Presidency explained that the work on the code of conduct group would continue. (Original version in French by Élodie Lamer)