The European Tax Observatory officially took up its duties on Tuesday 1 June. Financed by the European Union and hosted by the Paris School of Economics, it will be responsible for making recommendations in the field of tax fraud, tax evasion and aggressive tax planning.
“We want to be a source of new ideas to better tackle these policy problems”, said its Director, Gabriel Zucman, at a press conference from the Berlaymont. The Observatory will therefore not only collect data, but also make “concrete implementable proposals, based on facts, based on sound research”, he said.
Another of its objectives will be to contribute to a “more informed, democratic and inclusive” debate on taxation through the organisation of several public events.
For European Commissioner responsible for Taxation, Paolo Gentiloni, the launch of the Observatory is “an important step on our path to fairer taxation”.
And to inform the Commission’s work in this area, it relies on its full independence. “We count on it to provide impartial high quality research without any political or policy driven motivations”, added Mr Gentiloni.
Asked about the choice of French economist Gabriel Zucman to head the Observatory (see EUROPE 12607/28), the European Commissioner said that his profile was “perfect” for the job, recalling that he was not being asked to “become the new spokesperson of the Commission” but to “give high-level scientific contribution”.
On the same day, the European Tax Observatory unveiled its interactive public database on tax optimisation and tax evasion and its first ever report, entitled “Collecting the Tax Deficit of Multinational Companies: Simulations for the European Union”.
The report estimates the amount of tax revenue that the EU could raise by imposing a minimum tax on the profits of multinational companies under various scenarios and rates.
Thus, according to the study, an international agreement on a minimum rate of 25% would allow the EU to increase its tax revenues by 170 billion euros in 2021, an increase of 50% of the corporate tax revenues collected today. With a minimum rate of 15%, on the other hand - as suggested by the US - the additional tax revenue would only amount to about 50 billion euros.
According to Gabriel Zucman, a rate of 15% would be “way too low”. First of all, because all G7 countries have tax rates above 15%, but also because this threshold would be insufficient to restore the fiscal balance and ensure that the main winners of globalisation, the large multinationals, pay more tax.
However, he recognised that if there was an international agreement on a minimum tax, it would in any case be an extremely important step, whatever the rate, as it could pave the way for higher rates in the future.
See the report: https://bit.ly/3wNb2fL (Original version in French by Marion Fontana)