The ambition of the rapporteurs of the European Parliament on the two proposals aiming, in the longer term, to bring in a common consolidated corporate tax base in the European Union (CCCTB, split into two stages by the Commission, the common tax base first of all and consolidation at a later date) will cause them plenty of headaches during the negotiations, certain MEPs warned at an exchange of views at the committee on economic and monetary affairs of Wednesday 30 August.
Readers may recall that in his draft report, Paul Tang (S&D, Netherlands) aimed to introduce a definition of the notion of 'digital presence' to the proposed common tax base (see EUROPE 11827). This definition is based on data such as the number of connections, digital contact with individuals or the volume of data consumed. The company will be considered present in a country if it derives at least €5 million in annual revenue for its services in that country.
The Dutch rapporteur would also like to introduce a minimum taxation rate, an idea that is vehemently opposed by several European countries, stressing that they have sovereignty in this area. Petr Jezek (ALDE, Czech Republic) says that he opposes the idea and Germany's Bernd Lucke (ECR) feels it has no place in this proposal.
Nor, however, was the German Eurosceptic a fan of the idea put forward by the other rapporteur, Alain Lamassoure (EPP, Germany), that there is a “certain logic in allocating some of the resources” (from the CCCTB) to the financing of the EU budget. Lucke described this as absolutely unacceptable and a discussion for a different forum. His ally, Belgian MEP Sander Loones, was entirely opposed to the spirit of the proposal. He explained that it would hurt his region, benefiting only the stronger economies. Lieve Wierinck (ALDE, Belgium) and Marco Valli (EFDD, Italy) both supported the rapporteurs' idea of implementing both texts at the same time, even though the Commission is planning to stagger them by two years (see EUROPE 11647).
Lamassoure also pointed out that his idea of taking the opportunity provided by this text to look at how to tax the digital economy has gone down well. Responding to concerns expressed by Loones, he said that there was no fundamental reason why certain countries would be put at a disadvantage, as his draft report provides for a 'compensation' fund to be set up, that would be fed into by the gains of the countries that make them and would balance out the losses of the less fortunate countries. The Greens/EFA have already expressed hostility to this idea, he observed.
A number of countries fear for their tax revenue, “we need to think about a transition”, Tang said, adding: “what transition, given that this is an essential reform? Should there be a pilot scheme for the system? A compensation fund could help us in this transition”.
Pervenche Bérès (S&D, France) calls for a proper analysis of the proposed tax incentives introduced by the Commission, so as not to open up new loopholes in the tax systems.
Lastly, the European Commission says that it is examining the proposals of the Estonian Presidency of the Council of the EU on taxing the digital economy. These will be clarified at the informal meeting of the Ecofin Council of Tallinn (mid-September: Ed). “We greatly need an in-depth analysis of what can be done. Improving and amending the CCCTB can only give us partial solutions (…). We need an overall approach”, the Presidency representative said. (Original version in French by Élodie Lamer)