MEPs on the Committee on Economic and Monetary Affairs discussed a wide range of issues with Paolo Gentiloni, EU Commissioner for Economic Affairs, during a structured dialogue on taxation on Monday 26 September. In particular, they asked him about the temporary solidarity contribution that would be applied to fossil fuel companies, the transposition of Pillar II of the OECD agreement on corporate taxation in the EU and the national recovery plans under the Next Generation EU Recovery Plan.
Ukraine and energy prices. The REPowerEU strategy was set up to reduce Europe’s energy dependence on Russia and has been finalised as three strands: - demand reduction measures; - temporary capping on the income of sub-marginal electricity producers who derive windfall income from higher electricity prices; - a temporary solidarity contribution based on the excess profits made by the fossil fuel sector in the financial year 2022 (see EUROPE 13028/13).
“This temporary solidarity contribution will make it possible to redistribute the abnormal surpluses, profits made as a result of this crisis, to support those who need it most. I hope for an agreement by the end of the month”, Gentiloni said. Replying to Aurore Lalucq (S&D, French), he said that this measure would not be retroactive and would only affect fossil fuel companies, as surging profits were only a collateral effect of gas markets. It would affect about 900 EU resident companies.
“This contribution can be complemented by national initiatives”, stressed Mr Gentiloni.
Pillar II. MEPs have expressed their concern about the lifting of the Hungarian veto on pillar II of the OECD agreement on company taxation (see EUROPE 13026/15). Mr Gentiloni was reassuring: “We need to overcome this veto with any political means that we have at our disposal”. He then added: “We are still in time to overcome this unacceptable, and in my view this unjustified veto”.
Recovery plan. Isabel Benjumea (EPP, Spanish) asked whether the review of the national plans would result in changes to the rules incorporating tax incentives. Mr Gentiloni noted that “the guidelines are clear on what we can and cannot do with VAT reduction and excise duties”. He recommended sticking to the original plans.
Ernest Urtasun (Greens/EFA, Spanish) asked about the status of countries that have committed themselves to tackling aggressive tax planning in their recovery plans. “If we put pressure on, and we will, we can have good results”, the Commissioner replied, citing positive developments in the Netherlands as an example. (Original version in French by Anne Damiani)