Members of the Committee on Economic and Monetary Affairs (ECON) held an exchange of views with Paolo Gentiloni, European Commissioner for Economy, on Wednesday 28 June. They asked a number of questions on the implementation of the OECD agreement on minimum taxation of multinationals, as well as on inflation, value added tax (VAT) and the taxation of capital.
Mr Gentiloni said he was confident that Pillar I of the OECD agreement, which includes a new system for allocating taxing rights to multinationals (see EUROPE 13190/30), would be finalised. “The discussion is ongoing, and there is a chance to reach an agreement by 11 and 12 July. It’s not easy, because opinions differ, but it’s possible,” he said. “If the OECD countries reach an agreement, it means that the convention is approved and the signing process starts”, he added. This agreement will enable the EU to reap “several billion euros” in additional tax revenue, according to the Commissioner.
Asked by Dimítrios Papadimoúlis (The Left, Greek) about the implementation of the two pillars and the risk of delays, Mr Gentiloni was also fairly confident. He noted progress in the implementation of the directive transposing Pillar II within the EU, which should establish a minimum tax rate of 15% for multinationals.
Progress on these two pillars will enable the Commission to present the ‘Business in Europe: A Framework for Income Taxation’ (BEFIT) initiative (see EUROPE 13210/4) in September. “It will introduce a common framework, with simpler rules, reducing compliance costs and administrative burdens for companies, including small and medium-sized enterprises (SMEs) and consumers, and enhance tax transparency”, he announced.
Aurore Lalucq (S&D, French) asked Mr Gentiloni whether any measures were envisaged to deal with inflation linked to “disproportionate margins” of companies, as identified by the European Central Bank and the International Monetary Fund. In particular, she mentioned the extension of the temporary solidarity contribution to other sectors, such as food (see EUROPE 13155/15).
“The legal basis for this contribution is by definition temporarily limited, but there is nothing to prevent a Member State from levying windfall profit taxes at national level”, he replied.
As for the delay concerning the ‘SAFE’ initiative on aggressive tax planning (see other news), he explained that the text was ready from a technical point of view. “The only concern is not to overload the pipeline, while ‘UNSHELL’ is apparently not moving fast”, he admitted. He hopes that negotiations will progress under the Spanish Presidency of the EU Council. (Original version in French by Anne Damiani)