On Monday 6 May, the Reformist Movement (MR), the Socialist Party (PS), the Humanist Democratic Centre (cdH), Ecolo, Democratic Federalist Independent (DéFI) and the Workers' Party of Belgium (PTB) agreed on the need to establish a minimum effective corporate tax rate for all Member States during a "political event" organised by the National Centre for Development Cooperation CNCD-11.11.11.
While a study by the Greens/EFA group in the European Parliament recently revealed that the average effective corporate tax rate in the European Union is only 15% and that there are significant disparities between Member States (rates range from 2.2% to around 30%) (see EUROPE 12177/7), the six party representatives have in turn supported the creation of a European minimum effective rate.
There were only a few slight disagreements over the level of this rate. Some representatives, such as Paul Magnette (PS) and Caroline Persoons (DéFI), wanted to set it at 20%, stressing that this would not prevent a Member State from raising it, but others, like Philippe Lamberts (Ecolo) and Marc Botenga (PTB), agreed with the CNCD’s proposal to set it at 25%.
All the representatives then emphasised how difficult it will be to get this rate adopted, as tax issues require unanimity in the Council of the EU.
For Mr Lamberts, the whole issue lies in how to achieve the introduction of this European minimum rate. He recalled that the Greens/EFA in the Parliament, of which he is co-president, had challenged the use of Article 48(7) of the Treaty on European Union (TEU), known as the "passerelle clause", proposed by the European Commission (see EUROPE 12172/22). They regret that this clause, which enables Qualified Majority Voting to be made applicable in the Council in tax matters subject to the unanimity rule, itself requires unanimity.
Mr Lamberts reiterated the demand from the Ecolo party to use Article 116 of the Treaty on the Functioning of the Union (TFEU) instead. It provides for the possibility that Parliament and the Council, in the event of disagreement between Member States distorting the conditions of competition in the internal market and thereby causing a distortion which must be eliminated - in this case, fiscal dumping - may decide by a qualified majority (and not unanimously) in order to eliminate the distortion in question.
Paul Magnette (PS) said that an effective minimum rate of 20% would be a "substantial condition" for his party's support at the next Commission. "If it does not undertake to propose it via Article 116 of the TFEU, we will vote against this European Commission", he stated.
Finally, for Benoit Lutgen (cdH), believing that tax harmonisation will be achieved at the European level within the next two or three years is unrealistic. His party therefore suggests that pragmatism is shown by expanding the role of the European Public Prosecutor's Office. "We at the cdH suggest that the Public Prosecutor's Office, which verifies the use of European subsidies, should also be competent to check tax evasion and fraud at the European level", Mr Lutgen explained. (Original version in French by Damien Genicot - intern)