Members of the European Parliament’s Committee on Economic and Monetary Affairs (ECON) are set to adopt a resolution on Thursday 10 December on the reform of the European ‘black’ list of tax havens (see EUROPE 12608/30), drawn up by the Subcommittee on Tax Matters (FISC).
After a debate on Monday in the FISC subcommittee (see EUROPE 12617/23), the political groups finalised their negotiations. The compromise amendments, seen by EUROPE, recognise the positive impact that the list has already had, but nevertheless regret that it has not lived up to its potential.
They thus propose several ways of increasing the transparency and consistency of the list and suggest stricter criteria, accompanied by stronger defensive measures against tax evasion.
Formalising the process
The final text is expected to recommend that the process be formalised through a legally binding instrument. The EU Council’s Code of Conduct Group has been given the task of carrying out preparatory work for the list, although this was not part of its original mandate, and MEPs question its ability to fulfil this task.
The compromise amendments ask the EU Council to instruct the Commission, with the support of the Member States and the appropriate involvement of Parliament, to carry out the evaluation of the courts and to present to the EU Council a proposal for the list, which should be made public before the EU Council formally adopts the list.
Parliament also wishes to be more closely involved in the process. Thus, the text is expected to call for Parliament to be given an “observer” role in the Code of Conduct Group’s discussions and the possibility for the institution to provide an opinion on the list.
Unbiased criteria
MEPs also believe that the criteria for listing should be reviewed. In particular, the final text is expected to ask the EU Council to include, as an autonomous criterion, the automatic inclusion on the ‘black’ list of non-Member States with a 0% corporate tax rate or that do not tax corporate profits.
The text is also expected to support a broadening of the geographical scope of the list, while taking into account the position of the least developed countries. Furthermore, it is expected to call for a review of the United Kingdom upon its full withdrawal from the EU and a clear assessment of the United States with regard to transparency criteria.
More transparency
In the view of MEPs, the lack of transparency can lead to misinterpretation of decisions and may undermine public confidence in the process.
For example, they are expected to invite the Code of Conduct Group to disclose the participating authorities, topics of discussion, technical assessments, minutes, summaries, and conclusions adopted at its meetings. MEPs also believe that the methodology for assessing non-Member State schemes should be refined and fully disclosed.
Leading by example
The draft text on the table notes that “the Union’s influence in combating tax fraud and harmful tax practices worldwide depends on the example it sets at home” and stresses the need for consistency between the criteria for listing and the criteria for harmful tax practices within the EU.
It refers in particular to “a Member State” that recently received an overall rating of “partially compliant” for its level of compliance with the international standard on transparency and exchange of information from the Global Forum on Transparency and Exchange of Information for Tax Purposes - a silent reference to Malta.
With regard to the reference to European tax havens - contained in an earlier version of the compromises and supported by the S&D and Greens/EFA groups, but which the EPP wanted to see removed from the text - the new compromise includes a reference to “certain” Member States regularly receiving specific recommendations from the Commission on the need to combat aggressive tax planning.
A separate, more specific amendment from the S&D group will nevertheless be put to the vote. It refers to “six Member States” and recalls that Article 116 of the TFEU should be used when harmful tax practices distort the market within the EU.
The FISC subcommittee hopes that the resolution will obtain a large majority in the final vote in order to send a strong message to the Commission and to the Council of the EU. (Original version in French by Marion Fontana)