The co-rapporteurs Martin Hlaváček (Renew Europe, Czech Republic) and Andreas Schwab (EPP, Germany) updated the European Parliament’s Subcommittee on Tax Matters (FISC), on Wednesday 17 March, on the negotiations on their draft own-initiative report on digital taxation at the OECD and at EU level (see EUROPE 12666/9).
“We are confident now that we will be able to deliver a strong report with a clear message”, said Martin Hlaváček.
Negotiations are entering their final stages with a meeting between the political groups on Thursday 18 March, before the vote in the Committee on Economic and Monetary Affairs (ECON) on 23 March. Just in time for the EU Heads of State and Government meeting on 25-26 March, where digital taxation will be discussed.
More than 240 amendments were tabled to the original draft text (see EUROPE 12646/20), but the co-rapporteur believes that the majority of them have greatly improved the report.
For his part, Andreas Schwab mentioned some issues that are still under discussion. This is particularly the case for the threshold above which companies would fall under the scope of a digital levy. Certain groups are proposing the threshold of 750 million euros in revenue - which is currently the threshold considered by the OECD.
The co-rapporteur did not seem convinced by this proposal, while the ID Group opposed it, arguing that this could, among other things, encourage companies to hide their profits in order not to exceed the threshold.
Another important element for the S&D, Greens/EFA and The Left Groups is the wording for the minimum effective tax rate. These groups absolutely want to see the word “effective” included in the text, because of the large differences that can exist in some cases between the official corporate tax rate and the actual corporate tax rate. This is the wording already used by the OECD, recalled Niels Fuglsang (S&D, Denmark).
Furthermore, the political groups are looking for the right wording to say that tax competition is a principle that cannot be prohibited in the EU and can also have positive effects, said Andreas Schwab.
Damien Carême (Greens/EFA, France) called for a simple and unambiguous message. “To be influential, our report must be clear and concise, I think. However, at the moment, I fear that the proposed report is still too long and too dispersed and contains some contradictions that weaken our voice”, he said.
Then added: “For example, we cannot say on the one hand that we want more tax harmonisation at European level and tax solutions at international level and, at the same time, recall in each paragraph that national sovereignty in tax matters is essential”.
Opinion of the BUDG Committee. Meanwhile, on Wednesday, Parliament’s Committee on Budgets (BUDG) adopted an opinion to feed into the ECON Commission’s final report, which focuses on the proposed European digital levy, as a new own resource for the EU budget.
“Member States must respect the legally binding interinstitutional agreement reached last December, which determined that the next step regarding the EU digital levy should be a Commission proposal in June 2021”, said the co-rapporteur for this opinion, Valérie Hayer (Renew Europe, France), in a statement. (Original version in French by Marion Fontana)