The debate between Lyudmila Petkova, Chair of the EU Council’s Code of Conduct Group (CCG) on business taxation, and the European Parliament’s Taxation Subcommittee (FISC) on Thursday 17 March focused on the group’s reform, but also on the EU’s ‘black’ list of non-cooperative jurisdictions, the taxation of high net worth individuals and the impact of the directive transposing pillar II of the OECD agreement on international tax reform.
While Hungary and Estonia have blocked the adoption of the revised code of conduct on business taxation (see EUROPE 12848/9), “the Parliament has made it clear that the CCG needs to be reformed if harmful tax competition is to be tackled”, recalled Paul Tang (S&D, Netherlands), chair of the FISC subcommittee, in his opening remarks. “In addition, the CCG needs to be more open and transparent”, he said.
Lyudmila Petkova has repeatedly stated that the group of national experts has no mandate on certain topics, including personal tax regimes, nor to discuss the Parliament’s resolution on harmful tax practices of October 2021 (see EUROPE 12808/25).
Although the reform of the scope of the Code was discussed in detail under the Slovenian EU Council Presidency and despite “substantial progress”, “there is still work to be done”. However, Ms Petkova assured that “the CCG is currently focusing on expanding its mandate and geographical scope (and) is considering other activities in the near future”.
She also stressed that the CCG wants to improve its transparency. It now publishes its reports to the EU Council on its website, which will soon be redesigned. It is currently looking at how to make the documents it produces more accessible.
The Chair of the CCG also presented the group’s recent work. With regard to the ‘black’ list, “the CCG continuously monitors the jurisdictions covered by the geographical scope”. Most jurisdictions are, in her view, cooperating constructively with the EU and are committed to meeting their commitments.
More than 140 preferential tax regimes have been abolished, 27 additional countries have joined the OECD co-operation, and 13 countries have joined the OECD strategy to combat tax base erosion and profit shifting.
Therefore, as soon as the directive to implement Pillar Two of the OECD agreement on international tax reform is adopted, “it will be necessary to examine the black list criteria with the Pillar Two agreement in mind”, Ms Petkova stressed.
Gilles Boyer (Renew Europe, France) expressed “disappointment” at the “failure” of the Ecofin Council to reach a unanimous political agreement on the proposed directive on 15 March (see EUROPE 12911/16). (Original version in French by Anne Damiani)