The European Commissioner for Economy, Paolo Gentiloni, expressed confidence in the finalisation of various tax initiatives during an exchange of views with members of the European Parliament’s Subcommittee on Tax Matters (FISC).
OECD agreement. The first pillar of this agreement is the Multilateral Convention, which allows jurisdictions to reallocate and exercise a domestic right to tax a defined portion of residual profits. “Ten days ago, at the G20, I continued to discuss with several of our partners to overcome the remaining obstacles to the signature of the Multilateral Convention by the end of the year”, Mr Gentiloni said (see EUROPE 13247/16). “The finalisation of Pillar I is not confirmed, but it is achievable”, he added. He pointed out that the ratification process would then take some time.
With regard to Pillar II, which introduces a minimum 15% tax on multinationals, “Member States should keep working hard to transpose the directive on Pillar II by the end of this year” (see EUROPE 13212/17). “The Commission is providing all the support it can to meet this deadline”, he said.
‘Unshell’. The ‘Unshell’ directive, which sets out rules to prevent the misuse of shell companies for tax purposes, has seen no progress since March (see EUROPE 13216/14). Rasmus Andresen (Greens/EFA, German) asked the Commissioner what he thought of Germany’s reticence. “I am confident that we can find a way with Germany, which has always been vocal in fighting tax avoidance”, he replied.
BEFIT. Mr Gentiloni spoke at length about the BEFIT directive, presented last week, which proposes to simplify tax rules and compliance for cross-border companies (see EUROPE 13248/20). “I don’t know if all the Member States will be convinced by BEFIT, but the OECD agreement will give us a boost, and some will be made aware and will cooperate”, he said.
He added that this proposal was more realistic than the directive on the Common Consolidated Corporate Tax Base (see EUROPE 12721/3), which had been blocked in the EU Council. Criticised by Manon Aubry (The Left, French), who regretted that BEFIT did not combat tax evasion and fraud, Mr Gentiloni replied that BEFIT was not introducing formulary apportionment because “we do not have solid and stable data to do so”. (Original version in French by Anne Damiani)